Ethereum News Today: Cryptocurrency Market Slumps Ahead of Fed Rate Decision as ETF Optimism Sustains Ethereum Gains

Bitcoin, Ethereum, and XRP all experienced declines in recent trading sessions as the cryptocurrency market braces for the U.S. Federal Reserve’s upcoming interest rate decision. The anticipation of potential rate cuts or a pause in tightening has led to heightened volatility, with investors adopting a more cautious stance ahead of the key event [1].

Bitcoin, currently trading near $119,000, showed minimal movement in early July, with little direction ahead of the Fed’s announcement [6]. Despite the lack of strong price action, Bitcoin ETF inflows remained steady, with deposits for BTC funds slowing to $80 million after hitting $157 million on Monday [1]. Meanwhile, Ethereum has shown relative resilience, rising nearly 3% this week and inching closer to the $4,000 level [1]. However, the altcoin has also faced a pullback, with its price slipping to $3,866 from a recent high of $3,941 [6]. Ethereum inflows have accelerated, with $1.59 billion flowing into the token over the past week, signaling growing investor interest amid optimism around potential ETF approvals [10].

XRP, the third-largest cryptocurrency by market cap, has seen a more pronounced decline. The token’s price correction from its all-time high on July 18 has continued, with XRP stalling amid a slump in open interest [2]. On July 29, XRP was trading near $3.16, down 0.6% from the previous week [6], and some analysts warn that the pullback could extend below the $3.00 level [2]. The token is expected to be highly sensitive to the Fed’s rate decision, as it recently showed unusual volatility in response to macroeconomic cues [5].

The broader cryptocurrency market is also feeling the ripple effects of the Fed’s looming decision. Derivatives markets have seen a decline in funding rates and open interest, particularly for tokens like BONK, which has declined 30% from its July peak as investors step back [4]. This market behavior reflects a broader trend of reduced speculative activity and increased caution ahead of the central bank's move [4].

Analysts remain divided on the potential impact of the Fed’s decision. QCP Capital noted that they will be watching the U.S. Fed and employment figures as strong predictors for the third quarter, with Q3 potentially marking a meaningful inflection point [1]. Federal Reserve Governor Christopher Waller has signaled support for a rate cut in July, and newly appointed Vice Chair for Supervision Michelle Bowman has also expressed support for a cut [1]. This internal policy divergence is increasing short-term uncertainty for investors [1].

Despite the pullbacks, Ethereum continues to attract attention as a potential beneficiary of the ETF narrative. The token’s open interest surged to $60 billion as of July 29, with 1 million ETH withdrawn from exchanges—a sign of strategic accumulation by long-term holders [9]. This trend contrasts with Bitcoin’s relative stagnation and signals a possible shift in investor sentiment toward altcoins [10].

The market’s reaction to the Fed’s decision will likely determine the short-term trajectory of major cryptocurrencies. While Bitcoin and XRP have seen more pronounced slumps, Ethereum’s mixed performance highlights the diverging dynamics within the crypto space. Investors are advised to closely monitor macroeconomic cues and derivative market indicators as the decision date approaches [1].

Source:

[1] Ethereum Defies Bitcoin Slump as Analysts See Path to 5000 (https://decrypt.co/332520/ethereum-defies-bitcoin-slump-as-analysts-see-path-to-5000)

[2] Why XRP Price Pullback Could Extend Below $3.00 (https://www.fxstreet.com/cryptocurrencies/news/ripple-price-forecast-xrp-eyes-16-surge-but-tapering-open-interest-paints-a-grim-picture-202507291515)

[4] BONK Pullback May Continue as Funding Rates, Open Interest Dip (https://www.fxstreet.com/cryptocurrencies/news/bonk-price-forecast-bonk-pullback-may-continue-as-funding-rates-open-interest-dip-202507301244)

[5] XRP (Ripple) Just Did Something It Hasn’t Done Since (https://www.aol.com/xrp-ripple-just-did-something-085100204.html)

[6] Bitcoin Price Today: Little Changed Near $119k Ahead of Fed Meet (https://ca.investing.com/news/cryptocurrency-news/bitcoin-price-today-little-changed-near-119k-ahead-of-fed-meet-tariff-deadline-4122660)

[9] Ethereum Surges to $60B Open Interest as 1M ETH Withdrawals Signal Strategic Accumulation (https://www.ainvest.com/news/ethereum-news-today-ethereum-surges-60b-open-interest-1m-eth-withdrawals-signal-strategic-accumulation-98-holders-profit-2507/)

[10] Ethereum Inflows Spike as ETF Optimism Builds Momentum (https://m.fastbull.com/news-detail/ethereum-inflows-spike-as-etf-optimism-builds-momentum-4337373_0)