Bitcoin (CRYPTO:BTC) experiences a 7% drop, hovering near $65,000, in response to dwindling hopes for May Fed rate cuts and rising Treasury yields, triggering concerns over persistent inflation and affecting broader crypto market sentiment.

With a 95% probability of the Fed maintaining interest rates in May, Bitcoin's sensitivity to interest rate expectations becomes evident, leading to a market reshuffle in investment flows.

The Grayscale Bitcoin Trust (GBTC) reports a significant outflow of $302.6 million, contributing to a total outflow of $15.07 billion from Bitcoin ETFs, exacerbating the market downturn and affecting smaller digital assets.

Analysts anticipate the Federal Reserve's upcoming decisions, with data suggesting a 95% likelihood of unchanged target rates in May, leading to a crypto sell-off at the beginning of the week.

Despite the current challenges, there's optimism for a potential crypto market revival with analysts speculating on a June rate cut by the Fed, which could boost risk appetite, market liquidity, and investment in cryptocurrencies, offering a glimmer of hope for the future.