Crypto Markets Lose Steam Ahead of Fed Policy Verdict

Key Moments

Macro Uncertainty Weighs on Digital Assets

Cryptocurrency markets soften as investors trim exposure to risk assets ahead of the Federal Reserve’s interest rate decision on Wednesday. Bitcoin (BTC) is holding around $65,000 after retreating from a Monday high of $67,292, while major altcoins follow the same pattern. Ethereum (ETH) is trading below $1,800 and Ripple’s XRP is quoted under $1.20, broadly echoing Bitcoin’s pullback.

Market positioning suggests participants expect the Federal Open Market Committee to keep its benchmark rate unchanged in the 3.50%-3.75% corridor. This meeting is notable as the first interest rate decision under Fed Chair Kevin Warsh, whose four-year term began in May.

The policy announcement comes against the backdrop of the highest inflation in the United States in three years and ahead of the planned signing of a US-Iran peace agreement on Friday. Investors will scrutinize Warsh’s press conference after the decision for any guidance on the timing and direction of future policy moves, given that the rate path remains a critical driver of liquidity conditions and risk appetite.

Energy Markets React to Geopolitics and G7 Positioning

Oil prices ease into Wednesday’s session, with West Texas Intermediary (WTI) quoted at $75, down from around $85 on Sunday. Following the scheduled signing ceremony, the US and Iran are expected to move toward reopening the Strait of Hormuz and lifting the blockade on Iranian ports.

Iran’s foreign minister indicated on Tuesday that the next phase of negotiations will begin on Friday, with talks anticipated to run for 60 days to reach a comprehensive agreement that covers nuclear issues and the removal of sanctions.

At the same time, G7 leaders released a joint statement on Wednesday pledging to work toward diversifying energy supply routes and reducing dependence on the Strait of Hormuz. The conflict in the Middle East previously drove a sharp spike in Oil and Gas prices as fears of supply disruption amplified market volatility.

Risk Sentiment and Crypto ETF Flows

Investors remain guarded ahead of the FOMC outcome and the signing of the US-Iran Memorandum of Understanding (MoU). Even so, spot Bitcoin ETFs recorded mild net inflows of $10 million on Tuesday, a reversal from roughly $64 million in outflows on Monday.

Ethereum spot ETFs extended a two-day run of inflows, with nearly $10 million on Tuesday following almost $23 million on Monday. Cumulative net inflows have risen to $11.22 billion from $11.21 billion over the same period, while total assets under management average $9.89 billion, based on SoSoValue figures.

Demand for XRP exposure through spot ETFs has also remained resilient. Inflows reached approximately $5 million on Tuesday, compared with $2.82 million on Monday and $2.04 million on Friday. Cumulative net inflows hold at $1.44 billion, with net assets under management slightly above $1 billion.

XRP ETF flows | Source: SoSoValue

Despite the recent outflows seen earlier in the week, Simon-Peter Massabni, XS.com’s Head of Business Development, states that “institutional participation remains significantly higher than in previous cryptocurrency market cycles.”

Technical Landscape: Bitcoin Holds Above Key Trailing Support

Bitcoin is trading below $65,000 as it extends its retreat from levels above $67,000. The pair maintains a capped, short-term bearish tone with spot prices trading well under the 50-day, 100-day and 200-day Exponential Moving Averages (EMAs), which sit at approximately $70,297, $73,011 and $78,373, respectively. This stacked EMA configuration highlights a substantial overhead supply zone, even as some momentum gauges show tentative improvement.

On the daily chart, the Moving Average Convergence Divergence (MACD) histogram is widening in positive territory, and the Money Flow Index (MFI) is edging toward the mid-40s. Together, these indicators suggest that recent buying interest has strengthened, though not yet enough to overturn the prevailing downside structure.

On the upside, initial resistance aligns with the 50-day EMA near $70,297. Above that, the 100-day EMA around $73,011 and the 200-day EMA close to $78,373 represent successive technical hurdles that would need to be reclaimed on a sustained basis to alleviate the current bearish pressure.

On the downside, the Parabolic SAR on the daily timeframe offers first support near $61,578. A decisive break below this level would open the way toward a deeper retracement, potentially targeting prior lows under $60,000. As long as prices hold above this trailing support, however, the market retains scope for continued consolidation beneath the clustered EMA band.

Ethereum and XRP Confront Overhead Pressure

Ethereum is changing hands at $1,766, reflecting a negative short-term bias as price action remains capped beneath the 50-day, 100-day and 200-day EMAs on the daily chart. These moving averages collectively act as a ceiling on rallies. The Parabolic SAR is currently tracking below the market near $1,582, indicating that the latest bounce is technically still in play.

The MACD histogram is positive and the MFI is hovering around 46, hinting that downside momentum has moderated. On the upside, the 50-day EMA near $1,954 marks initial resistance, followed by a more important barrier at the 100-day EMA around $2,110. The 200-day EMA near $2,383 represents a broader trend threshold. On the downside, a clear daily close back under the Parabolic SAR level around $1,582 would likely re-expose the market to lower levels close to $1,500, despite recent improvements in short-term momentum signals.

XRP is trading at $1.19 and remains in a broadly bearish technical regime, with price still well below the 50-day, 100-day and 200-day EMAs. The configuration of these EMAs above spot continues to point to an intact longer-term downtrend even after the recent recovery attempt.

The Parabolic SAR is currently positioned at $1.07, suggesting an effort by bulls to stabilize price above recent lows. The MACD histogram has nudged into slightly positive territory on the daily timeframe, indicating better near-term momentum, while the MFI remains below the 50 mark.

Looking higher, resistance is first seen at the 50-day EMA around $1.28, followed by the 100-day EMA near $1.37 and the 200-day EMA at $1.58. These levels form a series of caps that would need to be cleared to meaningfully reduce broader bearish pressure. On the downside, the Parabolic SAR level around $1.0717 serves as immediate support. A daily close under this point would leave XRP vulnerable to another push toward previous lows at $1.05.