Bitcoin and Ethereum Market Update

Bitcoin and Ethereum extended losses on Sunday as traders braced for another volatile week, with U.S. stock futures indicating a downward trend ahead of the Federal Reserve’s upcoming policy meeting.

Price Movement

• Bitcoin slipped nearly 1.8% to trade around $82,700.
• Ethereum dropped 2.5% to $1,889.

Investors are assessing macroeconomic uncertainty and shifting regulatory developments.

Stock Market Overview

As of Sunday evening:
– Dow Jones Industrial Average futures declined 0.37%.
– S&P 500 and Nasdaq Composite futures fell 0.46% and 0.55% respectively.

Markets are increasingly focused on the Federal Reserve’s rate outlook, with futures traders expecting the central bank to hold interest rates steady this week.

Economic Considerations

While expectations for rate cuts later this year remain intact, recent inflation data and strong labor market numbers have raised concerns that the Fed may delay easing monetary policy on Wednesday. A more hawkish stance could weigh on risk assets, including crypto, which have recently traded in line with equities.

Geopolitical Tensions

President Trump’s announcement of new tariffs and potential EU retaliatory measures have introduced new uncertainty into global markets. His executive order to establish a Strategic Bitcoin Reserve initially fueled speculation about U.S. government involvement in crypto markets, but this was short-lived as no immediate budget was allocated for any purchases.

Derivatives Market Insights

In the derivatives market, leverage remains high, as depicted by Coinglass data showing Bitcoin futures open interest remains elevated despite over $253 million in liquidations in the past 24 hours. Funding rates, which turned negative during last week’s sell-off, have returned to neutral, indicating uncertainty in market positioning.

Looking Ahead

With macroeconomic risks mounting and regulatory changes unfolding, traders are on the lookout for a catalyst to break the current downtrend. The Federal Reserve’s policy decision and signals from institutional investors or regulatory bodies may influence whether crypto markets regain momentum or face further downside pressure in the weeks ahead.