Cryptocurrency markets slid broadly on Tuesday as anxiety ahead of Wednesday's Federal Reserve decision combined with a deepening chip stock selloff to weigh on sentiment, with fading expectations that the CLARITY Act will pass before the Senate's August recess adding further pressure.

Fed Decision Looms Over Markets

Sentiment across crypto reflected broader market anxiety ahead of the Federal Reserve's interest rate announcement on Wednesday afternoon. With inflation still running above the Fed's 2% target, markets are weighing the odds of a rate hike to curb inflationary pressure. According to the CME FedWatch tool, traders currently assign roughly a 32% probability to a quarter-point hike this week. Looking ahead to September's meeting, the market sees a 57% probability of a quarter-point hike and a 22% probability of a half-point hike — suggesting traders expect the Fed to act, if not this week then soon after.

Chip Stock Selloff Spills Into Crypto

A deepening selloff in semiconductor stocks compounded the pressure on crypto sentiment, as markets brace for a wave of earnings updates from major tech companies. Asian markets closed sharply lower, led by South Korea's KOSPI index, which erased more than 10%. On Wall Street, the tech-heavy Nasdaq Composite was trading down more than 1% at the time of reporting.

Notably, the drop in market capitalization came alongside a 15% spike in trading volume — a combination that often signals active repositioning rather than simple drift lower. A decline in crude oil prices and a mild pullback in the US dollar helped limit losses across digital assets somewhat.

Bitcoin Falls Below $63,000

Bitcoin, the largest cryptocurrency, traded 4.1% lower at $62,883.40, after swinging between $65,648 and $63,016 over the past 24 hours. The current price sits roughly 50% below Bitcoin's all-time high of $126,198.07, reached on October 7, 2025, leaving the asset down 28.1% year-to-date.

US spot Bitcoin ETFs recorded net outflows of $12 million on Monday, a sharp improvement from Friday's $240 million in outflows, with the iShares Bitcoin Trust ETF accounting for $9 million of Monday's outflows. Bitcoin currently ranks 13th among all global assets by market capitalization, sitting between SpaceX in 12th and Tesla in 14th, according to companiesmarketcap.com.

Ethereum and Major Altcoins Under Pressure

Ethereum fared worse than Bitcoin, trading 5.4% lower at $1,865.71, within a 24-hour range of $1,865.64 to $1,974.68. ETH now sits about 62% below its all-time high of $4,953.73 from August 25, 2025, and remains down more than 37% year-to-date. Unlike Bitcoin, Ethereum ETFs bucked the outflow trend — recording $12 million in net inflows on Monday, reversing Friday's $71 million in outflows, with the iShares Ethereum Trust ETF accounting for the entire flow. Ethereum has slipped to 86th in the global asset ranking by market cap.

Other major tokens saw sharper declines. BNB, ranked 4th, slipped 2% to $564.00, trading 59% below its all-time high. XRP plunged 5.8% to $1.04, sitting about 73% below its January 2018 peak. Solana dropped 6.2% to $72.44, roughly 75% below its all-time high. TRON lost 1.8% to $0.3244, while Hyperliquid tumbled 9.6% to $54.05 — one of the sharpest declines among top-10 assets. Dogecoin, the leading memecoin by market cap, fell 5% to $0.0694, still trading 91% below its 2021 peak.

Why It Matters

Tuesday's selloff illustrates how closely crypto sentiment is now tied to broader macro and equity market signals — from Fed rate expectations to semiconductor stock weakness. With Wednesday's FOMC decision looming and CLARITY Act momentum fading ahead of the Senate's summer break, crypto markets face a stretch of overlapping catalysts that could determine whether this pullback proves temporary or extends further into August.

This article is for informational purposes only and does not constitute financial advice. Do your own research.