Bitcoin News Today: Fed Rate Decision Looms Over 3% Crypto Market Drop as Trump Weighs in on Policy and Tariffs

The Federal Reserve’s upcoming interest rate decision has intensified speculation in the cryptocurrency market, with investors closely monitoring potential shifts in monetary policy. Scheduled for release this week, the decision carries significant weight as traders attempt to gauge whether the central bank will signal rate cuts in response to evolving economic conditions. Recent statements from Fed officials and U.S. President Donald Trump have added layers of uncertainty, with Trump’s rare visit to the Federal Reserve building underscoring the political pressures influencing economic policy. “If Powell reduces rates, I’ll stop criticizing him. I’ve also briefed him on tariffs,” Trump stated, highlighting the interplay between political rhetoric and market expectations [1]. The outcome of the Fed’s meeting could directly impact inflation dynamics and investor sentiment, particularly for crypto assets sensitive to interest rate fluctuations.

Market participants are parsing conflicting signals as they prepare for a pivotal week. While Polymarket traders assigned a 96.3% probability to the Fed maintaining rates at its next meeting, indicating cautious optimism, the broader crypto market has shown volatility. Bitcoin, for instance, faced a $100 billion valuation contraction following a failed attempt to break the $120,000 price level, reflecting heightened sensitivity to macroeconomic developments [2]. Meanwhile, a 40% probability of two rate reductions priced in by markets has sparked mixed reactions, with analysts noting that rate cuts could lower borrowing costs and stimulate economic activity—potentially benefiting risk-on assets like cryptocurrencies [1]. However, this optimism clashed with a nearly 3% decline in total crypto market capitalization during the week of July 25, as investors navigated conflicting signals from monetary policy and on-chain volatility [5].

Trade policy developments further complicate the landscape. With approximately 200 tariff letters expected to be finalized by Friday, the outcome of negotiations could either reinforce or destabilize current market trends. A potential trade agreement with the European Union, if announced, might inject optimism into crypto markets by mid-week, though delays could erode U.S. credibility in trade negotiations. Analysts emphasize that trade tariffs and Fed communications will remain critical drivers of market direction through August, with Luno highlighting the influence of inflation and employment data on crypto trajectories [9].

Large-scale on-chain movements have also introduced additional uncertainty. A $175 million XRP transfer by Ripple co-founder Chris Larsen, unrelated to the Fed, underscores the crypto market’s susceptibility to large holder actions, complicating interpretations of macroeconomic signals [8]. As the Fed concludes its policy cycle ahead of the September meeting, investors are balancing near-term monetary policy expectations with broader macroeconomic indicators. Earnings reports from tech and finance giants like Microsoft, Amazon, and Mastercard, coinciding with the Fed’s final pre-September meeting, may further shape market sentiment [10].

The coming weeks will be critical in determining whether crypto assets can consolidate gains amid evolving central bank narratives. For now, the market remains in a holding pattern, with traders weighing the likelihood of Fed easing against the fragility of current price levels.

Source:

[1] [Trump's Remarks on Potential Fed Cuts Spark Crypto Market Optimism](https://www.ainvest.com/news/trump-remarks-potential-fed-cuts-spark-crypto-market-optimism-2507/)

[2] [Two Upcoming Decisions Could Shake Crypto Markets This Week](https://cryptodnes.bg/en/two-upcoming-decisions-could-shake-crypto-markets-this-week/)

[5] [Crypto Market Bulls Bleed Over $1B This Week as Record](https://www.mitrade.com/insights/crypto-analysis/others/fxstreet-BTCUSDETHUSDXRPUSDDOGEUSD-202507251522)

[8] [Market Bets Hold Firm With 96.3% Odds Say No Fed Rate Cut](https://www.techi.com/polymarket-96-3-odds-no-fed-rate-cut-july-2025-fomc/)

[9] [Bitcoin Price Risk 4% Drop Amid Speculation of Powell Resignation](https://blockzeit.com/bitcoin-price-risk-4-drop-amid-speculation-of-powell-resignation/)

[10] [Microsoft, Amazon, Mastercard, and Other Wall Street Earnings](https://www.mitrade.com/insights/news/live-news/article-3-988813-20250726)