On Sunday, Bitcoin and Ethereum continued their downward trend as traders prepared for a potentially tumultuous week, especially with U.S. stock futures indicating a decline before the upcoming Federal Reserve policy meeting.
Bitcoin fell by almost 1.8%, hovering around $82,700, while Ethereum saw a 2.5% decrease to $1,889. Investors are weighing the effects of economic uncertainty and evolving regulatory issues.
As of Sunday evening, futures for the Dow Jones Industrial Average were down 0.37%, with S&P 500 and Nasdaq Composite futures slipping 0.46% and 0.55% respectively.
Market attention is increasingly directed towards the Federal Reserve’s interest rate forecast, as futures traders are anticipating the central bank will maintain current interest rates this week.
While the possibility of rate cuts later in the year persists, recent inflation reports and solid job market figures have sparked concerns that the Fed may postpone easing its monetary policy this Wednesday.
A more aggressive monetary policy stance could negatively impact risk assets, including cryptocurrencies, which have recently moved in tandem with stock markets.
The current geopolitical climate is also exerting added pressure on markets.
Recent tariff announcements from President Trump and possible retaliatory actions from the European Union have introduced new uncertainties into global financial markets.
Additionally, his executive order aimed at creating a Strategic Bitcoin Reserve generated temporary speculation regarding U.S. government engagement in the cryptocurrency space, though investors soon acknowledged that no immediate budget had been allocated for such purchases.
The initial surge in Bitcoin prices following this announcement was fleeting, as traders quickly realized that there would be no prompt governmental action.
Meanwhile, the derivatives market continues to exhibit high leverage among traders.
According to Coinglass data, crypto futures open interest remains significant despite over $253 million in liquidations over the past day.
Funding rates, which briefly dipped into negative territory during last week’s sell-off, have stabilized at neutral, indicating a state of uncertainty in market positions.
With increasing macroeconomic threats and ongoing regulatory changes, traders are on the lookout for a trigger that could reverse the current downtrend.
The outcome of the Federal Reserve’s policy meeting, along with any new indications from institutional investors or regulatory agencies, could shape whether the crypto markets recover or face additional downward pressure in the weeks ahead.
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