Markets Shift Focus to Fed as Oil Prices Retreat to Pre-War Levels

Bitcoin’s Sharpe ratio has dropped to levels that have historically marked cycle bottoms since 2015, though past instances suggest this typically leads to a prolonged consolidation phase rather than an immediate rebound.

Meanwhile, all seven “Magnificent 7” stocks are trading lower on Wednesday, with the MAGS ETF down დაახლოებით 9% from its May record high.

Two primary factors are weighing on performance. First, investors are rotating out of Big Tech into stronger-performing sectors such as memory and semiconductor stocks. Second, the heavy spending tied to AI expansion is putting pressure on valuations. The Mag 7 companies are deploying significant capital through free cash flow, debt issuance, and equity offerings, raising a key question for markets: when will these investments translate into earnings? Until tangible AI-driven returns emerge, pressure is likely to persist.

Seasonal trends also suggest mid-June often represents a weak period for Bitcoin, frequently aligning with local bottoms. The asset is currently trading near $65,000, not far above its June low, which briefly dipped below $60,000 earlier this month.

Historical patterns reinforce this trend:

• In June 2021, Bitcoin plunged დაახლოებით 50% from its April peak to around $30,000 amid China’s mining crackdown.
• In June 2022, it fell to करीब $17,000 following the collapse of Three Arrows Capital and Celsius.
• In June 2023, Bitcoin traded below $25,000 after pulling back from its April rally near $30,000.
• In June 2024, it spent much of the month consolidating around $65,000.
• In June 2025, Bitcoin hovered near $100,000 before rallying to new highs in July.

Markets are trading cautiously ahead of the Federal Reserve’s policy decision, with investors widely expecting rates to remain unchanged. Risk assets are mixed: the Invesco QQQ is modestly higher, gold is slightly lower, Bitcoin has slipped below $65,000, and the U.S. Dollar Index is hovering just under 100.

Oil has been a notable mover, falling back toward $76 per barrel as geopolitical tensions ease.

Looking ahead, some market participants remain optimistic. SkyBridge CEO Anthony Scaramucci believes the current lack of enthusiasm could be a bullish signal, suggesting Bitcoin may begin a sustained rally in late 2026. He argues that weak sentiment, low RSI levels, and thin liquidity could amplify upside if demand returns.

On-chain data also points to a potential shift. The RHODL Ratio, which compares long-term holder wealth to short-term capital, is beginning to decline from elevated levels—a pattern seen at prior cycle bottoms in 2015 and 2022. This suggests long-term holders are regaining dominance and that capital rotation may be underway.

At the same time, crypto markets have softened slightly ahead of the Fed decision, with Bitcoin down around 1.7% during European trading hours. The move appears to reflect consolidation following recent gains rather than a broader reversal.

In contrast, traditional markets have strengthened, with U.S. stock futures and bonds moving higher while oil prices decline.

The Federal Reserve is expected to hold rates steady in the 3.50%–3.75% range, shifting investor focus to updated projections and policy guidance. Oil’s return to pre-conflict levels may also help ease inflationary pressures.

Bitcoin ETFs are showing early signs of stabilization after weeks of outflows, with modest inflows recorded in recent sessions. BlackRock’s IBIT has led demand, attracting over $150 million across four consecutive days.

Additionally, Binance order book data indicates a growing imbalance in favor of buyers, suggesting increasing demand as passive buy orders outpace sell-side liquidity.

Finally, on-chain metrics continue to highlight accumulation trends. Bitcoin’s Sharpe ratio recently dropped to -20—a level previously seen at major cycle lows—while accumulator wallets have added significant holdings and exchange reserves have declined.

However, past cycles indicate that such signals tend to precede a base-building phase rather than an immediate rally. With the Fed decision looming, markets now await the next catalyst to determine Bitcoin’s near-term direction.

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