Bitcoin and Ethereum both extended their losses as traders braced themselves for a volatile week. U.S. Stock futures are pointing downwards ahead of Federal Reserve’s policy meeting.
Ethereum fell 2.5%, to $1.889, and Bitcoin dropped nearly 1.8%, to $82,700. Investors assessed the effects of macroeconomic uncertainties and changing regulatory developments.
As of Sunday evening, Dow Jones Industrial Average futures declined 0.37%, while S&P 500 and Nasdaq Composite futures fell 0.46% and 0.55%, respectively.
The Federal Reserve rate outlook is a major focus for the markets, and futures traders have priced in a very high probability of the central bank holding interest rates constant this week.
Recent inflation numbers and a strong job market have led to concerns about the Fed delaying easing its monetary policy this Wednesday.
Crypto, for example, has traded along with stocks in the past few months.
The geopolitical tensions also add pressure.
Recent announcements by the US President of possible new tariffs as well as retaliatory action from Europe have created uncertainty on global markets.
His executive order establishing a Strategic Bitcoin Reserve briefly fuelled speculation regarding U.S. involvement in the crypto market before investors realized there was no budget allocated immediately for purchase.
Bitcoin's initial spike following the announcement was short-lived, with prices reversing once traders recognized the lack of immediate action from Washington.
In the derivatives sector, however, leverage is still high.
Coinglass’ data shows that crypto futures are still a hot topic, even after over $253 million was liquidated in the past 24 hour.
The funding rates have now returned to their neutral position, after briefly turning negative last week during the sell-off. This indicates that market positioning is uncertain.
As macroeconomic risk increases and regulatory changes unfold, traders look for catalysts to end the current downward trend.
The Federal Reserve’s decision on policy, along with new signals coming from investors and regulatory agencies, may determine whether the crypto market regains momentum in the next few weeks or continues to face downward pressure.
