Bitcoin drops below $80,000 as Fed caution weighs on crypto markets

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Bitcoin drops on Fed caution

Highlights

Bitcoin drops nearly 2% to around $79,800 amid risk-off sentiment ahead of the Federal Reserve's policy decision, with markets eyeing potential rate hikes in December.
Major tokens including Ether, XRP, and SOL fall up to 3%, while TRX alone rises less than 1%, as investors de-risk across crypto assets.
Asia tech equity weakness intensifies pressure, with South Korea's Kospi down 1% and MSCI Asia Pacific Index extending its longest losing streak since April.

Fed outlook and broad token declines

As reported by CoinDesk, Bitcoin is falling nearly 2% to about $79,800 as traders reduce risk ahead of the Federal Reserve's policy decision on Wednesday. Markets are watching for signals on whether the central bank could raise rates in December, a prospect that could tighten liquidity and add pressure on cryptocurrencies and equities.

Selling is spreading across most major tokens. Ether is down nearly 3% to just above $2,300, XRP is losing about 3% to $1.28, and SOL is sliding 2% while holding near $100. DOGE, ZEC, HYPE and BNB are each falling 1% to 2%, while TRX is the only major token in positive territory, up less than 1%.

Jeff Mei, chief operating officer at crypto exchange BTSE, says investors already appear to be de-risking as Bitcoin moves below the $80,000 mark. He adds that while the Fed is unlikely to change rates this week, the market is focused on how strongly Chair Kevin Warsh signals the possibility of a December increase.

Mei also points to record high oil prices, the escalating U.S.-Iran conflict and inflation as factors that could push the Fed toward a more aggressive tone. Higher rates generally make borrowing more expensive and tend to draw money away from riskier assets such as crypto and stocks.

Asia tech weakness adds to market pressure

Pressure on crypto sentiment is also coming from Asia, where the AI-linked equity sell-off is continuing. South Korea's Kospi is falling 1% after Goldman Sachs strategists cut their 12-month target for the index by 25%, a notable signal for traders who use the benchmark as a gauge of AI sentiment because of its heavy exposure to chipmakers such as Samsung Electronics.

Chip stocks are leading losses on Japan's Nikkei, while Chinese AI model developers are also retreating. Nasdaq 100 futures are slipping 0.1% as investors brace for earnings from major U.S. technology companies this week, and the MSCI Asia Pacific Index is down 0.1% as it struggles to recover from four straight weeks of losses, its longest losing streak since April.

Oil markets are offering some relief, with Brent crude falling 2% from a six-month high to about $114 a barrel after President Donald Trump says it is "getting to be decision time" on whether to reach a deal with Iran or resume attacks. Treasuries are also rising, but for crypto traders the immediate technical focus remains on Bitcoin's need to reclaim $82,500, the support level it lost last Thursday, to restore buyer confidence.

Our earlier coverage of the Federal Reserve’s policy messaging debate explained how Chair Kevin Warsh’s push for less public guidance has met resistance from other officials, leaving markets highly reactive to speeches and interviews ahead of the next rate decision. We noted that mixed signals alongside sticky inflation data kept rate-hike odds finely balanced and repeatedly shifted expectations as investors recalibrated what the Fed might do next.

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