Bitcoin News Today: Cryptocurrency Market Loses $71 Billion as Fed Rate Cut Hopes Diminish

The global cryptocurrency market saw a significant decline on August 16, 2025, with its total market capitalization dropping by $71 billion to approximately $3.85 trillion. This downturn was primarily driven by shifting macroeconomic expectations and heightened geopolitical tensions. Investors have grown cautious as optimism about an imminent U.S. Federal Reserve rate cut has diminished. Traders had previously expected a 98% probability of a rate cut in September, but this has now fallen to 84% following stronger economic data, including a 0.5% rise in the Producer Price Index and 1.2% growth in retail sales, which signaled continued economic resilience [1][2].

Bitcoin, the leading cryptocurrency by market capitalization, fell by 1.9% in the last 24 hours, trading at around $115,440. The price has struggled to hold above the critical $115,000 support level, and technical indicators suggest weakening bullish momentum. The Relative Strength Index for Bitcoin has dropped below the neutral 50 level, signaling growing bearish sentiment. If the selling pressure persists, Bitcoin could test the $112,256 support level, potentially leading to further short-term losses [2][5].

Ethereum was hit harder, with a 3% drop in price, bringing its value closer to $3,200. Other major cryptocurrencies, including BNB and XRP, also declined by 2-3%, reflecting broad-based weakness in the market [1][2]. XRP, in particular, fell below $3 as part of a wider profit-taking trend [7].

The broader risk-off sentiment was exacerbated by geopolitical uncertainty following the Trump-Putin meeting in early August, which triggered increased caution among investors. This environment has been particularly challenging for digital assets, which typically perform well under accommodative monetary policy and geopolitical stability [3]. In addition, leverage in the crypto market has reached bull-market levels, with a 27% rise in crypto-collateralized loans over the previous quarter. While leverage can enhance returns during bull markets, it also increases the risk of sharp losses when prices fall [4].

Despite the overall market weakness, Chainlink (LINK) bucked the trend, surging nearly 9% in the last 24 hours to reach $24.65. The Parabolic SAR indicator remains below LINK’s candlesticks, confirming an active uptrend. Continued buying pressure could push the price toward the $26.73 resistance level and potentially even $30.00. However, any reversal in sentiment could trigger a decline to $22.63 or further to $19.88 [1].

The Altseason Index, which measures whether altcoins are outperforming Bitcoin, rose to 51%, indicating a slight shift in favor of alternative cryptocurrencies. Bitcoin’s dominance has slightly fallen to 58.9%, suggesting some capital is rotating into altcoins and DeFi projects [1]. Meanwhile, Solana slipped only 0.5%, showing relative resilience compared to Bitcoin and Ethereum. Polygon gained 2.3%, supported by ongoing growth in DeFi activity, while Dogecoin fell 4%, partly due to reported security concerns [1].

Looking ahead, the Jackson Hole symposium, set for later in the week, will be closely watched for any indication of the Federal Reserve’s future policy direction. The event has historically played a key role in shaping interest rate expectations and is expected to provide clarity that could influence the crypto market’s trajectory [2]. Until then, traders anticipate continued volatility, with the total market cap expected to find support at $3.81 trillion and resistance at $3.89 trillion [2].

In other developments, Japan’s Financial Services Agency is set to approve JPYC Inc. to issue the country’s first yen-denominated stablecoin later this year. The move is a key step in Japan’s financial modernization and underscores growing institutional interest in stablecoins and tokenized assets [1].

Overall, the current market conditions highlight the cryptocurrency sector’s susceptibility to macroeconomic shifts and geopolitical events. As investors await further signals from central banks and economic data, the market remains in a state of consolidation and uncertainty.