Policy signals from two major central banks over the past week generated divergent market reactions for BTC. The Bank of Japan raised its interest rate to 1%, yet the market remained relatively calm compared to previous hikes where prices tumbled. BTC dipped briefly before rebounding to approximately $66,000. Conversely, the Federal Reserve's actions exerted a more profound impact. Despite keeping interest rates unchanged, the hawkish tone of its policy statements drove BTC prices down to $64,000. While the Federal Reserve appeared inactive on the surface, significant shifts occurred beneath. New Chair Jerome Powell presided over the meeting for the first time and removed supportive language from the statements. The PCE inflation forecast for year-end was raised from 2.7% to 3.6%.

Furthermore, 9 out of 18 officials expected at least one more rate hike this year, with 6 anticipating two hikes. Consequently, the market rapidly re-priced, pushing the probability of a December rate hike to nearly 85%. As an asset highly sensitive to liquidity, BTC faced immediate pressure. On the announcement day, spot BTC ETFs recorded net outflows exceeding $80 million as institutional investors sought to avoid uncertainty. Data compiled by Woofun AI shows that these outflows coincided directly with the shift in macroeconomic expectations.

Concurrently, the US job market demonstrated continued resilience. Initial jobless claims dropped to 226,000, while layoff levels remained at historical lows. The unemployment rate held steady at 4.3% for the third consecutive month. In May, 172,000 new jobs were created in the non-agricultural sector, maintaining a three-month average around 188,000. While positive for workers, this data proved detrimental to the crypto market, which had been anticipating interest rate cuts. Strong employment figures reduced the Federal Reserve's room for monetary easing, causing both real yields and the US dollar to rise, thereby suppressing risk appetite.

However, some positive indicators emerged from on-chain metrics. Glassnode data revealed that spot order buying was rebounding, with passive buyers more effectively absorbing supply. Implied volatility and option skewness declined from extreme levels, and the volatility premium even turned negative. Nevertheless, BTC prices remained 15% below the average market level of $77,000 and nearly 10% below the cost basis for short-term holders at $72,600. Woofun AI notes that the MVRV for short-term holders stood at only 0.9, indicating recent entrants had lost an average of nearly 10%. A rebound close to this level could trigger a surge in selling pressure.

The realized market value of BTC decreased by 1.45% over the past 90 days. Although the pace of decline has slowed, new capital continues to flow out of the market. The relatively calm reaction to Japan's rate hike stemmed from the central bank's promise to limit long-term interest rates by purchasing approximately 2 trillion yen in government bonds monthly, mitigating the impact of arbitrage transactions closing out. This 25-basis-point hike to 1% marked the highest level since 1995, but the market had already priced in more than 90% of this possibility.

Additionally, easing tensions between the US and Iran helped reduce energy price impacts.

However, Japan's PPI rose by 6.3% year-on-year in May, signaling that rising energy cost pressures persist. If interest rates continue to climb, the attractiveness of yen financing leverage will decline, altering the global liquidity landscape accordingly. Woofun AI analysis suggests that the true test of liquidity remains centered on US policy decisions rather than Japanese monetary adjustments.

From now until December, every CPI, PCE, and non-agricultural report will serve as real-time feedback for the market. In the short term, BTC prices are likely to remain volatile within the $60,000 to $70,000 range. A decisive breakthrough will require clear macroeconomic catalysts. Although the on-chain structure is gradually improving, a true reversal can only be confirmed when prices return to the average market level of $77,000. Otherwise, prolonged volatility will remain the dominant trend for the asset class.