I just found out the reason for bitcoin flash crash!

reason: fear of rate hike

Near-Term (June/July meetings): Extremely low chance of a hike. The CME FedWatch Tool shows a 95% to 99% probability that the Fed will hold rates steady in the immediate meetings, preferring a pause to assess incoming data.

By End of Year: The odds of a rate hike hitting the tape by the December meeting have jumped to roughly 37% in the futures market.

Mid-2027 Horizon: Prediction markets like Kalshi are pricing in a 50% chance of a cumulative 25-basis-point hike landing before July 2027. Major institutions like J.P. Morgan now view a hold through the rest of the year followed by a 25 bps hike in Q3 2027 as a realistic base case.

Why a Hike is Back on the Table

Sticky Inflation: With inflation reversing course and climbing toward 4%, the Fed is still far from its formal 2% target.

Internal Fed Friction: The April FOMC meeting showed significant internal hawkishness, resulting in an 8-4 vote to hold rates steady. Four members dissented because they wanted tighter language regarding future policy, marking the first time since 1992 that four officials dissented on a decision.

Geopolitical Energy Shocks: Ongoing conflicts keep crude oil volatile. If energy costs continue to pass through into core inflation, economists note the Fed's primary mandate of price stability will force their hand.

What is Keeping the Fed on Hold (For Now)

While a hike is a growing risk, a prolonged "higher-for-longer" pause remains the baseline expectation. Aggressive hikes face severe resistance because:

Yields are already doing the work: The 2-year Treasury yield pushing back up toward 4% acts as a "pseudo rate hike," tightening financial conditions without the Fed needing to move.

Macroeconomic Strain: Pushing rates higher risks cracking vulnerable sectors like commercial real estate and compounding debt-servicing costs on the massive short-term U.S. national debt rolling over this year. $BTC $ETH $EDEN