Bitcoin and XRP are still under selling pressure on Tuesday, tracking a broader risk-off move across stocks and commodities. The selloff comes as growing dissent within the Federal Reserve raises the possibility of a rate hike in September, rattling markets that had priced in a pause. Oil prices are also extending declines amid hopes of de-escalation in the US-Iran war, adding to the cautious tone.
Crypto takes a hit
Bitcoin and XRP both saw red on Tuesday. The moves mirror weakness in equities, with the S&P 500 and Nasdaq also lower. Traders are watching whether the selling accelerates if the Fed signals a more hawkish stance. For now, the selling pressure hasn't let up, and volumes are elevated compared to last week.
Oil slides on war de-escalation hopes
Crude oil prices continued to fall as signs emerge that the US-Iran conflict may be cooling. Lower oil typically eases inflation fears, but the market is more focused on the Fed's next move. The decline in oil is a bright spot for consumers, but it's doing little to lift risk appetite across the board.
Fed dissent clouds the outlook
The Federal Reserve's internal divisions are becoming harder to ignore. Several dissenting voices have publicly argued for a rate increase, and markets are now pricing in a non-negligible chance of a hike in September. That's a sharp reversal from earlier expectations of a cut. Investors are awaiting further signals, including upcoming economic data and Fed speeches. The uncertainty is keeping a lid on any recovery attempts in crypto and stocks alike.
All eyes are on the Fed's next policy meeting in September. Until then, any hawkish commentary could keep pressure on risk assets. For crypto, the correlation with equities remains tight, meaning the path of least resistance may be lower until the rate outlook clears up. The next big test comes with the release of the Fed minutes and any public remarks from voting members in the weeks ahead.
