The cryptocurrency market was generally bullish, rallying after a two-day Federal Reserve meeting that kept interest rates on hold and hinted at a potential rate cut later this year.

Data from Farside Investor showed that there were significant withdrawals of approximately $742 million from Bitcoin ETFs this week, with the largest withdrawals from Grayscale Bitcoin Trust (GBTC) and Invesco Galaxy Bitcoin ETF (BTCO) at $386.6 million and $10.2 million respectively.

Despite this significant capital outflow, Bitcoin's market performance remained strong, with the cryptocurrency recovering from a low of $60,775 to a high of $68,100 before settling at $66,640 in early trading on Thursday.

The recovery in Bitcoin's price came after Federal Reserve Chairman Jerome Powell backed the Fed's forecast of three rate cuts this year, even as inflation rises.

This development highlights the complex relationship between institutional movements and cryptocurrency valuations, as Bitcoin's robust demand has allowed it to withstand negative institutional pressures.

CryptoQuant analysts have provided a long-term forecast indicating that the current Bitcoin bull cycle is far from over. The firm's data shows that short-term holder investments account for only 48% of total bitcoin investments, a figure that historically reaches 84%-92% at the end of a bull cycle. Additionally, valuation metrics such as the CryptoQuant Earnings Index remain outside the market's typical top zone, maintaining a position above the 1-year moving average.

The broader cryptocurrency market also posted gains, with Ether rising 1.2% to $3,379.43 on Wednesday and other cryptocurrencies such as Matic, Solana and Dogecoin posting gains.

Cryptocurrency stocks including Coinbase, MicroStrategy, Iris Energy, CleanSpark, Riot Platforms and Marathon Digital also performed well.

Despite the recent decline caused by short-term holders cashing out their BTC holdings and subsequent liquidation of long positions on margin trading platforms, experts believe such pullbacks are normal in Bitcoin bull markets. However, they warn that a fall below $60,000 could signal a more significant decline to $50,000.