Fournier highlights that the Fed’s continued reluctance to cut rates, combined with escalating hostilities between Israel and Iran, could accelerate Bitcoin’s decline. He points to recent outflows from spot Bitcoin ETFs as a tangible sign of investor unease, with capital retreating from risk assets in anticipation of further volatility.
“The market will be closely attuned to the Fed’s language on future rate cuts,” Fournier notes. “This will likely determine whether the current correction deepens or finds support. Given the backdrop of uncertainty and Bitcoin’s positioning just below previous highs, we are de-risking. The near-term trajectory looks volatile, and any further deterioration in the geopolitical landscape could trigger sharper downward moves.”
Tensions in the Middle East spiked on the night of June 13, 2025, as Israel launched a targeted strike on Iran’s military leadership—a development that sent Bitcoin tumbling and rattled broader markets. Meanwhile, the Fed’s last rate meeting on May 7 saw the benchmark left unchanged, and with US inflation accelerating in May, CME Group’s FedWatch Tool shows a 99.9% probability of the rate being held steady at the June 18 decision.
Despite these headwinds, some analysts see a potential turning point ahead. Matt Menu, ETF strategist at 21Shares, forecasts a capital rotation into risk assets in Q3 2025 if the Fed ultimately moves to cut rates—even if not as early as June. A backdrop of robust venture capital activity and improving macro conditions could provide a foundation for renewed upward momentum in Bitcoin and other high-beta assets.