Bitcoin slipped under $95,000 Monday as renewed geopolitical tensions and economic uncertainty rattled crypto markets ahead of a closely watched Federal Reserve interest rate decision.
Fed Expected to Hold Rates Steady
All eyes now turn to the Federal Reserve, which is set to meet this week. The central bank is widely expected to maintain rates between 4.25% and 4.50%, resisting mounting political pressure from President Trump to cut rates.
Fed Chair Jerome Powell has signaled caution, suggesting that persistent inflation and unpredictable trade disruptions leave the Fed with little room to ease. Bitcoin and broader risk assets are trading with caution as markets await the Fed’s forward guidance.
Trump’s Tariff Threats Shake Global Markets
President Donald Trump reignited trade war fears over the weekend, announcing a 100% tariff on foreign-made films as part of his “America First” economic platform. It follows his April tariffs on steel, aluminum, cars, and consumer goods—a broad attempt to reshore U.S. manufacturing.
While Hollywood isn’t a traditional flashpoint for monetary policy, the move stirred broader market concerns that Trump’s populist tariffs could stoke inflation and spark retaliatory action from global trade partners. Bitcoin, often treated as a hedge against fiat instability, initially benefited from tariff fears in April but has since reversed course amid tightening U.S. policy expectations.
Bitcoin’s Volatility Reflects Macro Jitters
The recent drop in Bitcoin—from over $97,000 to the $94,000 range—illustrates how deeply interconnected crypto markets have become with broader macroeconomic signals. Once seen as an isolated asset class, Bitcoin is now reactive to:
- Federal interest rate policy
- Tariff announcements
- Inflation expectations
- Global capital flows
This marks a shift from past cycles, where Bitcoin’s internal dynamics (such as mining or halving cycles) dominated price action. In 2025, external policy shocks—particularly from the White House or the Fed—are increasingly driving volatility.
Broader Crypto Market Feeling the Pressure
Bitcoin wasn’t alone in the sell-off. Ethereum dropped 2.5% on the day, while meme coins like Dogecoin and Pepe saw double-digit declines. DeFi platforms also reported slowing user activity amid the uncertain rate outlook.
Despite the pullback, analysts see long-term upside for Bitcoin. “It’s acting like a high-beta macro asset right now,” said crypto strategist Lina Zhang. “Once policy stabilizes, Bitcoin could resume its role as a global hedge.”
What Comes Next for Bitcoin?
Investors now await the Fed’s decision and press conference, which may determine Bitcoin’s next leg.
If the Fed signals a prolonged hold or hints at future tightening, Bitcoin may struggle to hold current levels.
On the other hand, any unexpected dovish pivot—or renewed instability from tariff blowback—could reignite interest in decentralized assets.
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