Fed's Hawkish Pivot Crushes Bitcoin Rally Despite US-Iran Peace Deal

Geopolitical relief from the US-Iran peace MoU initially sent Bitcoin surging, but the optimism was short-lived. The market's brief flirtation with a risk-on rally evaporated faster than a puddle in the desert when the Federal Reserve dropped its hawkish bombshell. Bitcoin, which had touched $66,315, quickly reversed course, now trading significantly lower and closer to its weekly lows. The Federal Reserve, under new Chair Kevin Warsh, held rates steady but signaled a dramatic shift in its outlook. A surprising majority of FOMC participants now project at least one rate hike for 2026, a stark contrast to previous expectations of cuts or holds. This hawkish pivot validates fears of persistent inflation driven by strong wages and supply constraints, pushing Treasury yields skyward. This monetary policy shockwave rippled through all risk assets. The S&P 500, Nasdaq, and Dow all experienced sharp sell-offs, erasing trillions in market cap. Bitcoin, unable to escape the broader macro pressure, followed suit, demonstrating that even significant geopolitical wins can't override the dominant influence of central bank policy on crypto markets.