Bitcoin's fragile floor cracks as Fed hawks circle and ETF investors keep pulling out: analysts

Bitcoin fell to $58,000 on Thursday before partially recovering, extending a correction that has pushed the world's largest cryptocurrency to its lowest levels since late 2024, as a hotter-than-expected core PCE inflation reading stoked fears that the Federal Reserve will keep interest rates elevated for longer.

The May Personal Consumption Expenditures price index — the Fed's preferred inflation gauge — showed core prices rising 3.4% year-over-year, its highest level since October 2023, while the headline index accelerated to a 4.1% annual rate driven in part by higher energy prices. Monthly core PCE ticked up 0.3%.

"Bitcoin deepens its correction as inflation strengthens the Fed's hawkish stance," Simon-Peter Massabni, Head of Retail Sales at XS.com, said. The data confirms the Federal Reserve is unlikely to pivot toward rate cuts in the near term, he added, with the central bank already showing less willingness in recent communications to consider easing.

Can-Luca Koymen, investment strategist at Sygnum Bank, read the print similarly.

"This is a print-by-print Fed now, and the number that also matters is this core PCE print, not just CPI, since that's the Fed's preferred gauge," Köymen said.

Sygnum's base case is for the Fed to hold across the next two to three meetings, a more hawkish call than Fed funds futures, which priced roughly a 52% probability of a September rate cut heading into the data.

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ETF streak and gamma pressure

U.S. spot bitcoin (BTC) exchange-traded funds recorded $696 million in net outflows on June 25, stretching a redemption streak to six consecutive sessions, according to SoSoValue data.

The U.S. spot ether (ETH) ETF cohort logged a parallel six-day outflow streak, shedding $81.9 million on the same day.

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Mounting ETF pressures arrived ahead of Friday's $10.6 billion quarterly options expiry on Deribit, the largest of 2026 and accounting for roughly 37% of total bitcoin open interest on the platform.

With roughly 80% of that notional out of the money, the expiry settled with max pain at $72,000–$74,000, far above spot, undermining the price-pinning mechanics that max pain theory predicts, as The Block reported.

Bitfinex analysts had warned that bitcoin trading below the gamma flip at $68,000–$70,000 placed the entire range in negative-gamma territory, a regime where dealer hedging amplifies moves rather than containing them.

The $60,000 put wall, anchored by roughly $450 million in June 26 puts, constituted the structural floor heading in.

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Gabe Selby, head of research at CF Benchmarks, pointed to the $50,000–$60,000 zone as a historically durable base.

"Bitcoin first established this level as support in mid-2024, consolidating here following the U.S. spot ETF launch rally, and it's held through everything thrown at it since: the yen carry unwind, the election cycle, and every other high-time-frame retest," Selby said.

Whale conviction vs. macro headwinds

Lacie Zhang, research analyst at Bitget Wallet, argued the correction reflects a selective rather than broad flight from crypto.

BTC dominance holding near 55% while prices fell indicates capital is rotating into higher-quality assets rather than exiting the space entirely, she said, with blue-chip Layer 1s and yield-generating sectors absorbing defensive flows.

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Zhang flagged Friday's post-expiry positioning reset — not the PCE print itself — as the more consequential near-term variable. In her view, if ETF outflows simply stabilize and volatility normalizes after the quarterly book clears, bitcoin's recovery could overshoot current consensus estimates.

Kyle Rodda, senior financial market analyst at Capital.com, contextualized the macro noise.

Wall Street trading was choppy despite clearing two meaningful risk events, namely Micron's strong earnings beat and the PCE data, with Apple's price hike announcement and end-of-quarter portfolio rebalancing generating most of the intraday volatility, he wrote.

The downside was concentrated in tech names that had significantly outperformed through the quarter, consistent with fund managers trimming winners into month-end.

Cycle bottom debate

Ki Young Ju, chief executive of CryptoQuant, cast doubt on the idea that bitcoin is approaching a cycle trough.

His 4-year rolling realized price risk/reward ratio has touched the realized price at every major historical cycle bottom. As of Friday, bitcoin remains well above that level, suggesting the risk/reward has not yet shifted decisively in favor of buyers by historical standards.

While the bottom discourse continues to garner participants, Bitwise CIO Matt Hougan previously argued that whether the top is in offers the more convincing focal point.

Bitcoin was trading around $59,000 on Friday, still below the $60,000 psychological level it breached on Thursday when it hit its intraday low of $58,000. Ether changed hands for under $1,525 around the same time, The Block’s price page shows.

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