Breaking: Bitcoin Falls to $64K as Iran Threatens Israel amid Fed Rate Decision Jitters

Bitcoin tumbled to around mid-$64K levels on Wednesday, extending losses amid escalating geopolitical tensions in the Middle East and investor uncertainty ahead of the Fed rate decision and key U.S. economic data.

Almost $56 million in longs were liquidated from top crypto assets such as BTC, ETH, XRP, WLD, and SPCX in just the last few hours. Crypto market fear & greed index dips to 22 after a recent rebound from 9 (extreme fear).

Iran Threatens Retaliation to Israel Over Strikes on Lebanon

Middle East tensions spiked as Iran’s military issued fresh warnings against Israel, threatening a “harsh response” if Israeli attacks in southern Lebanon do not cease. This caused oil prices to surge, triggering a drop in Bitcoin below $65K psychological level.

Iran’s Khatam al-Anbiya central command accused Israel of violating a recent ceasefire agreement, following strikes that killed four people in Lebanon. The threats come despite an earlier US-Iran peace agreement to open the Strait of Hormuz.

Iranian officials have reiterated warnings of strong retaliation, including potential strikes on Israeli targets, while criticizing ongoing Israeli operations. The latest warning added weight as the latest agreement to enable Iran to tap into a total of $100 billion in frozen funds and the $300 billion reconstruction fund.

Market participants are closely monitoring the situation, as any further escalation could increase volatility and renewed inflationary pressure risks.

In response, the Khatam al-Anbiya Headquarters cautioned that if the Israeli regime's military does not halt its aggression in southern Lebanon, it should expect a severe response from the powerful armed forces of the Islamic Republic of Iran.

— Tasnim News Agency (@Tasnimnews_EN) June 17, 2026

Bitcoin Falls Ahead of Fed Rate Decision and Retail Sales Data

Bitcoin fell today as traders braced for the release of May U.S. retail sales data and the FOMC meeting outcome. While the Fed is expected to hold rates steady in the 3.50%-3.75% range, market conditions could worsen if new Fed Chair Kevin Warsh adopts a hawkish tone.

The expected 0.5% month-over-month rise in US retail sales would cause the Federal Reserve to maintain or even hike interest rates. This is due to resilient consumer spending despite higher energy prices amid Middle East tensions.

Bitcoin is trading near $64,880 at press time, down more than 3% over the past 24 hours. Trading volume has decreased by 23% as prices slipped from a 24-hour high of $66,900.

In addition, CoinGlass data showed massive selling in the derivatives market across Bitcoin, Ethereum, XRP, and other leading altcoins. At the time of writing, the total BTC futures open interest dropped 3.30% to $48.13 billion in the last 24 hours. The 4-hour BTC futures OI fell 1.18% on CME and 1.54% on Binance.

Analyst Ted Pillows noted that Bitcoin appears to be repeating the exact Feb 2026 pattern. He predicts that de-risking amid the Fed rate decision could cause a crash to $62K levels, if the pattern repeats. Notably, the Bank of Japan hiked interest rates to a 31-year high of 1%, which risks unwinding of carry trades if the yen strengthens.

Even though temporary seller exhaustion is clear, popular analyst Rekt Capital said “The buy-side volume to take advantage of that hasn’t been strong at all.” BTC continues to struggle with February lows, with $65.7K as key resistance to break for a rebound.