Bitcoin and Ether Drop After Hawkish Fed Move as Trump-Iran Deal Fuels Equity Rally

Crypto markets fell broadly on Thursday, ignoring the positive boost from a newly signed Iran peace agreement that lifted equities, after the Federal Reserve opted to hold interest rates steady but reinforced a more hawkish stance focused on inflation over growth.

Bitcoin was trading near $63,900, down around 3% in the past 24 hours, though still up roughly 2% on the week, according to CoinDesk data. Weakness was widespread across major assets: ether dropped 3.4% to $1,733, XRP slid 3.9% to $1.17, and solana declined 3.6% to $71. Hyperliquid’s HYPE, which had led gains earlier in the week, fell the most—down 7.2% to $69—while still holding a weekly gain of about 28%. Tron stood out as the only major token in positive territory, rising 0.9%.

The primary catalyst was the Federal Reserve. While policymakers kept rates unchanged at 3.5%–3.75% in line with expectations, updated projections signaled higher inflation risks and a slower pace of future rate cuts, with some officials even suggesting rates may need to rise further.

This marked the first policy decision under new Fed Chair Kevin Warsh, who noted intense internal debate and reaffirmed the central bank’s commitment to price stability. The more hawkish tone strengthened expectations of tighter financial conditions, which typically reduce liquidity support for risk assets such as cryptocurrencies.

In contrast, equities reacted more positively, supported by geopolitical developments. President Donald Trump signed an interim agreement with Iran aimed at ending hostilities and reopening the Strait of Hormuz, boosting broader risk sentiment in traditional markets.

S&P 500 futures climbed as much as 0.9%, while Nasdaq futures gained up to 1.5%. Brent crude also eased toward $78 per barrel. Crypto, however, failed to follow the equity rally, underscoring its current sensitivity to monetary policy rather than geopolitical easing.

Analysts say Bitcoin is likely to remain range-bound unless a stronger catalyst emerges. “We expect bitcoin to continue to trade in the $60,000 to $70,000 range in the coming weeks absent any major catalyst,” said Hashdex’s Gerry O’Shea, pointing to potential triggers such as the signing of the CLARITY Act or further US-Iran de-escalation.

He added that sentiment has been subdued as attention shifts toward IPOs and AI-linked equities, though he expects capital rotation back into crypto as institutional participation grows and regulatory frameworks become clearer.

Overall, price action continues to resemble consolidation rather than a breakdown. Bitcoin holding in the low $64,000 range suggests selling pressure may be stabilizing, but upside remains constrained as tighter Fed policy limits liquidity conditions.