Bitcoin (BTC) traded under $64,000 on Thursday as Federal Reserve Chair Kevin Warsh's hawkish debut at the helm rattled risk assets, with traders pricing in rising odds of a rate hike before year-end.

Spot bitcoin exchange-traded funds posted an $82.2 million net outflow the same day, according to SoSoValue, with Fidelity's FBTC the only fund to log a meaningful inflow at $14 million. Spot ether (ETH) ETFs recorded a $29.4 million net outflow, led by $9.9 million in withdrawals from Grayscale's Ethereum Mini Trust.

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A market in repair

Bitcoin trades 15% below its onchain "True Market Mean" of $77,200, a discount that keeps the broader regime in bear-market territory despite a bounce off this month's lows, Glassnode said in a Wednesday report.

Short-term holder MVRV, which tracks the unrealized profit or loss on coins moved in the past 155 days, has climbed to 0.90 from 0.81 but remains below the 1.0 breakeven line. The implied cost basis for that cohort sits near $72,600, leaving recent buyers about 10% underwater on average.

Realized cap, the aggregate cost basis of coins in circulation, has contracted 1.45% over 90 days to $1.07 trillion. The seven-day change has nearly stalled at -0.18%, the first sign that capital outflows from the network may be slowing.

Spot liquidity has turned more supportive since bitcoin's slide toward $60,000. Binance's order book depth has shifted decisively toward bids, with buy-side liquidity now outweighing resting sell orders by the widest margin in months, according to the report.

Hawkish Fed complicates the picture

Bitcoin's slide through May and June tracked a broader geopolitical risk premium tied to the U.S.-Iran war, with the asset falling roughly 22% from $77,486 to a low of $60,861 as oil and gold drew safe-haven bids, according to Glassnode.

This week's ceasefire memorandum between Washington and Tehran unwound much of that pressure, as crude collapsed from $86 to $76, and bitcoin consolidated its bounce into the mid-$60,000s. The Federal Reserve complicated any clean read on that unwind.

Chair Kevin Warsh's first meeting at the helm on Wednesday scrapped forward guidance, shortened the post-meeting statement, and withheld his own dot from the closely watched rate projections, Capital.com Senior Financial Market Analyst Kyle Rodda noted.

Half of the Federal Open Market Committee's members now see a rate hike before year-end, pushing the market-implied probability of a hike to 90%. The shift sent stocks and gold lower and the dollar higher, Rodda added.

"A hawk never changes its feathers," Rodda argued, pointing to Warsh's inflation-focused instincts as a Fed governor in the 2000s reasserting themselves now that he holds the gavel.

Bitget Wallet Research Analyst Lacie Zhang, in commentary shared exclusively with The Block, characterized Wednesday's selloff in bitcoin and gold as a reaction to the Fed's tone rather than its decision, since the rate hold itself was already priced in. "A hawkish Fed can be priced; a less communicative Fed is harder to hedge," she explained.

She also expects volatility to stop concentrating around FOMC meetings and instead spread across every CPI, PPI, PCE, and jobs report between now and December, with markets "trading each data release as a live policy input," Zhang predicted.

A dissenting view

Not everyone agrees that the ceasefire is doing the heavy lifting.

Mike McCluskey, co-founder and CEO of tokenization platform tx and a former Fidelity Investments account executive, countered that bitcoin's price action this week is not a pure play on geopolitics.

The bigger swing factor is whether a sustained drop in oil prices recalibrates the inflation outlook enough to alter Fed policy, a slower-moving channel than the market's reaction to ceasefire headlines suggests.

Friday's scheduled signing in Switzerland is the real test, in his view, given the deal's interim status, lingering sanctions, and the threat of renewed strikes should nuclear talks falter.

Traders burned by reversals in April and early June are leaning on pattern recognition over headlines, McCluskey added. Spot bitcoin ETFs would need to string together inflows through Friday for the move to look like "genuine institutional repositioning rather than a fleeting relief rally," he wrote.

McCluskey also pointed to a break in the bitcoin ETF outflow streak as a precondition for changing his mind. That reprieve came Tuesday, when the funds posted a narrow $10.1 million net inflow after a multi-week run of withdrawals — a reversal that proved short-lived once Wednesday's $82.2 million outflow snapped it before the move could reach his Friday checkpoint.

Below the 200-week line

Bitcoin's dips below its 200-week moving average, now near $62,358, have historically marked some of the market's best entry points, Kraken Chief Economist Thomas Perfumo said.

Closes below that level have occurred on roughly 10% of trading days since mid-2017, and buyers at those levels have gone on to log median returns above 100% within a year and more than 300% within two.

"The median time to break even on their investment has been just two days," Perfumo said, adding that the median drawdown for those buyers over the following year has been just 9%.

A survey of crypto fund managers for The Block's Funding newsletter found most still expect bitcoin to move lower before any recovery, citing macro uncertainty, weaker liquidity, and capital rotating into AI trades.

Bitwise Chief Investment Officer Matt Hougan pushed back on that question entirely this week, arguing that pinpointing a bottom matters less than whether the next cycle top still lies ahead. "That's actually the wrong question for long-term investors to ask," he argued in a note to clients.

According to The Block's price page, bitcoin last changed hands around $63,900, while the second-largest cryptocurrency, ether, traded under $1,750.

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