Bitcoin slipped below $79,000 on Tuesday, and the rest of the crypto market followed it down. Zcash led the losses, and every major token ended the day in the red. The pullback comes as traders now price a 60% chance the Federal Reserve raises interest rates next week.
Why the Fed is on traders' minds
The probability of a hike has climbed, and that's weighing on risk assets. Crypto has been sensitive to rate expectations all year. When the Fed tightens, speculative assets tend to lose their shine. Tuesday's move looks like a direct response to that shift.
It's not just Bitcoin. The whole market felt the pressure. But the trigger appears to be macro, not crypto-specific. Traders are repositioning ahead of the central bank's decision, and that means selling first, asking questions later.
Zcash leads the slide
Zcash was the worst performer among major tokens. The privacy coin has been volatile for months, and Tuesday was no exception. It's not clear what drove the outsized drop, but the broader market didn't help.
When Bitcoin falls, altcoins usually fall harder. Zcash just happened to be at the front of the pack this time. The token has had a rough stretch, and Tuesday added to that.
Weekly gains still hold
Despite the red day, most tokens are still up over the past seven days. That suggests Tuesday's selloff is a pullback within a larger recovery, not a reversal. The question is whether the Fed news changes that.
If the market can hold its weekly gains through the rest of the week, the dip might be a blip. But if the Fed actually delivers a hike, those gains could evaporate quickly.
The Fed decision lands next week. If the hike happens, expect more volatility. If it doesn't, the market could bounce. Either way, traders are watching the central bank more than anything else right now.
For now, the crypto market is in wait-and-see mode. Tuesday's drop was real, but it hasn't broken the broader trend. The next few days will tell whether this is a pause or a turn.
