The Federal Reserve (FED) hawkish outlook and the conflict with Iran put pressure on the market, Bitcoin still has rebound potential in the second half of the year.

Gate News bot reports that the tough interest rate outlook and escalating tensions in the Middle East are putting pressure on Bitcoin and other Crypto Assets, although some analysts still believe there is room for a rebound in Bitcoin later this year.

The Federal Reserve is expected to keep its benchmark interest rate unchanged on Wednesday, but futures markets are now pricing in only one or two rate cuts in 2025, down from three to four at the start of the year. Traders are also wary of tariff-driven inflation, which could make policy tightening last longer.

BRN Chief Research Analyst Valentin Fournier stated that the unchanged funding rate and the volatility caused by the confrontation between Israel and Iran could further suppress Bitcoin prices. Fournier added that this uncertainty has suppressed recent inflows into Crypto Assets ETFs.

Fournier said: “The hawkish interest rate outlook, slowing ETF inflows, and rising geopolitical risks have collectively led to a negative shift in short-term momentum. The market will closely monitor the Fed’s wording regarding future rate cuts, which could determine whether the current downtrend deepens or finds support. Given this uncertain backdrop and slightly lower positions compared to previous highs, we are reducing risk. The road ahead may be volatile, and any deterioration in the geopolitical landscape could trigger a more severe downward trend.”

Source: The Block