Liquidity Squeeze and Fed Hawkishness Drive Bitcoin to Decade-Low Performance

Key Facts

Bitcoin is facing intense selling pressure, driving it toward its worst performance in a decade as expectations for tighter US monetary policy solidify. According to reports, the probability of a Federal Reserve rate hike by year-end has surged to 85% following a run of firm labor data, causing previous rate-cut bets to evaporate. Selling pressure is further compounded by a projected $900 billion Treasury cash rebuild, which is expected to drain the essential liquidity required to support Bitcoin prices.

This downturn coincides with a significant shift in the fixed-income market, where the 10-year US Treasury yield has climbed near 4.5%, diminishing the appeal of non-yielding assets like cryptocurrencies. In contrast, major technology peers continue to dominate capital flows; for instance, Nvidia reported a 262% year-over-year revenue surge in its latest earnings, validating the market's preference for tangible growth in the semiconductor sector over digital assets per market data.

Traders should closely monitor critical support levels, with the 0A7O.L instrument priced at 118.11 USD (at close 2026-06-05). Looking ahead, the economic calendar highlights Fed Governor Christopher Waller's upcoming speech and inflation data from South Korea and the Netherlands in early June as key catalysts that will determine the extent of the ongoing liquidity drain.