Bitcoin Prices Plummet as Fed Hawkishness and AI-Driven Inflation Take Hold
The first half of 2026 saw a drastic shift in global markets and Bitcoin's performance. According to Binance's Half-Year report, monetary discipline, AI investment, and corporate earnings are now driving the crypto market.
The Federal Reserve's hawkish stance has led to an 80% probability of a rate hike by December 2026, resulting in a -230 basis points shift from August 2024 to +33 basis points. This has caused Bitcoin's price to drop to $59,500, 33% below its YTD and over 50% below its October 2025 peak.
Despite this decline, long-term holders are holding onto their cryptos, and older Bitcoin supply remains untouched. The dominance of Bitcoin remained at 57% - 60%, showing that investors continue to seek refuge in $BTC rather than altcoins.
As the crypto market awaits a possible rate hike and AI-driven inflation, analysts predict a major correction for Bitcoin in H2 2026. If institutional selling decreases and ETF demand returns, it could improve liquidity and make monetary expectations less hawkish.