Although Bitcoin [BTC] showed a slight increase in daily performance, the overall cryptocurrency market remains stagnant.
At the time of writing, BTC hovers around $104,794, reflecting a flat trend after the Federal Reserve decided to maintain interest rates amid ongoing inflation concerns.
The market reacts to the Fed's rate cut decision.
Interestingly, despite the stagnation in the coin market, ETFs have performed strongly.
For example, according to Farside Investors, the spot Bitcoin ETF saw inflows of $388.3 million, while the Ethereum ETF attracted $19.1 million, indicating that institutional interest persists even as the market cools.
According to the New York Times, the Fed decided to maintain interest rates between 4.25% and 4.5%, a move that triggered volatility in the cryptocurrency market.
Due to uncertainties surrounding the Fed's future direction, market participants seem to adopt a wait-and-see attitude, especially since reports indicate that officials have differing views on the timing of potential rate cuts.
Trump criticizes Powell.
More concerning is that President Donald Trump once again criticized Fed Chairman Jerome Powell, calling him 'stupid' just hours before the policy announcement.
Trump believes that the central bank's benchmark interest rate should be lowered by at least two percentage points, highlighting the political pressure facing the Fed's monetary stance.
Trump made this off-the-cuff remark outside the White House, saying,
So we encounter a stupid person. Frankly, you may not cut production today. Europe has cut production ten times, and we haven't done it once. I guess he is a political guy, I don't know. He is a political guy, not smart, but he is costing the country a lot of money.
What do these numbers imply?
Although recent inflation data shows signs of easing, the Fed remains unwilling to change its monetary stance.
In May, the Consumer Price Index rose by only 0.1%, bringing the annual inflation rate down to 2.4%, close to the Fed's 2% target.
Similarly, personal consumption expenditures showed a slight increase in April.
However, despite these advances, Federal Reserve officials remain cautious, stating that uncertainties stemming from global economic pressures still exist, including the impact of former President Donald Trump's trade policies.
Fed's Powell emphasizes the unpredictability of the scope and duration of tariff-related impacts.
We know the timing will eventually come. It may come soon, or it may come quickly. As long as the economy is robust, as long as we see the current labor market, and reasonably good growth and declining inflation, we feel that maintaining the status quo is the right choice.
The Fed's rate cut is not the only reason for the market's calm.
While the Fed's stance has indeed played a role in suppressing market sentiment, broader global developments have also contributed to Bitcoin's recent volatility.
From renewed tariff threats from the Trump administration to escalating geopolitical tensions between Iran and Israel, external pressures are severely undermining investor confidence.
On-chain indicators further suggest a bearish trend, with more wallet addresses engaged in bearish activities than bullish ones, indicating potential price declines in the future.
Since Bitcoin often sets the tone for the broader cryptocurrency market, any significant drop could trigger widespread adjustments.
Therefore, with multiple factors converging, the future path of Bitcoin remains uncertain, as investors anxiously await the next decisive shift.
