Crypto Market Dips as Fed Meeting, Tariffs Spark Investor Caution

The Federal Open Market Committee (FOMC) meeting is set for Tuesday and Wednesday, and investors are on edge. Markets are watching closely for any signals on interest rates, especially after Federal Reserve Chairman Jerome Powell hinted at a wait-and-see approach. The US economy is already facing uncertainty due to new policies, particularly aggressive tariffs, and the impact is starting to show.

Stocks are wobbling, investor sentiment is shaky, and the crypto market is feeling the heat. In just 24 hours, the global crypto market has dropped by 3.1 percent, with Bitcoin and Ethereum both sliding.

Are we headed for trouble? Let’s take a closer look at what’s happening.

Bitcoin and Ethereum Face Losses

Bitcoin recorded a sharp single-day drop of 2.09 percent yesterday, closing at $82,577. Over the past 24 hours, it has declined by another 1.9 percent. However, as of now, it is trading slightly higher at $82,888, up 0.37 percent from yesterday’s closing price.

Ethereum also saw a significant drop, falling from $1,935 to $1,886 yesterday, a decline of 2.52 percent. In the last 24 hours, it has lost another 2.4 percent, though it has slightly recovered to $1,888.

Analysts believe this drop in sentiment is largely driven by concerns over economic policies and regulations.

Will the Fed Keep Interest Rates Steady?

As the FOMC meeting begins, most experts predict that the Fed will not make any changes to interest rates. Currently, the federal funds rate remains between 4.25 percent and 4.5 percent, with no immediate adjustments expected.

At the same time, inflation in the US has been gradually decreasing. In February, it dropped from 3 percent to 2.8 percent, and forecasts suggest it could fall further to 2.5 percent in March.

Trump’s Tariff Policy Creates More Uncertainty

President Donald Trump Donald Trump   Donald J. Trump is a US-based entrepreneur, Pro-crypto Politician, and the 45th and 47th President of the United States of America. He understands the importance and needs of the modern fintech world, and people look up to him as a dominant pro-crypto leader.   Quick Facts   Full name Donald John Trump Birth 14-06-1946, New York, United States Nationality American Education BS from the University of Pennsylvania Known For Businessman, Pro-Crypto Politician   Once doubtful about Bitcoindominance, he said in a tweet in 2019, “I am not a fan of Bitcoin", but now has a significant amount of cryptocurrency holdings in his kitty. He has also signed an Executive Order to establish a Strategic Bitcoin Reserve, which highlights his commitment to the future of cryptocurrency.   Donald Trump - Career Highlights & Events   2016 – Elected as the 45th President of the United States from the Republican Party.   2017 – Signed the Tax Cuts and Jobs Act, impacting investment environments   2019 – Criticized Bitcoin and Libra on X, dubbing them as "not money"   2024 – Campaign signals potential openness to crypto-friendly reforms   2025 –  Elected as the 47th President of the United States from the Republican Party.   A meme coin, $TRUMP, is associated with Donald Trump, which is listed on the Solana blockchain platform. His family also backs World Liberty Financial (WLF), a crypto venture.     President recently imposed import tariffs on China, Mexico, and Canada. His administration has also announced plans to expand these tariffs further.

Many believe the Fed will avoid making any major decisions on interest rates until the economic impact of these trade policies becomes clearer. However, some experts warn that tariffs could drive inflation higher, which could complicate the Fed’s future approach.

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US Markets Show Signs of Weakness

Stock markets have also been affected by the uncertainty. Futures tied to the Dow Jones, S&P 500, and Nasdaq Composite have all declined, reflecting cautious investor sentiment.

The cryptocurrency market has followed suit, with nearly all top-ten digital assets experiencing losses over the last 24 hours:

• Bitcoin is down 1.9 percent
• Ethereum has dropped 2.4 percent
• XRP has fallen 1.9 percent
• Solana has declined 4.6 percent
• Cardano is down 3 percent

Despite $253 million in crypto futures liquidations over the past day, leverage remains high, suggesting that traders are still taking risks. Funding rates have stabilized at neutral levels, indicating mixed sentiment in the market.

For now, crypto traders are looking for a clear signal to determine the market’s next move. A shift in Fed policy or a major institutional investment could provide that catalyst. Until then, volatility is likely to continue.

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