Bitcoin, Ethereum, XRP Decline as U.S. Fed Hike Odds Rise
Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), XRP and other top cryptocurrencies were trading under pressure on Sunday as the odds of a US Federal Reserve interest rate hike increased.
The global cryptocurrency market experienced a mild correction, with Bitcoin trading at $76,654.01 and Ethereum dropping to $2,481.77. Binance Coin is down to $717, while XRP is hovering around $1.35 during the trading session on Sunday.
The total crypto market capitalisation declined by 1.13% to $2.61 trillion over 24 hours. Sector performance indicates broad weakness, with PayFi, AI, and Layer1 sectors shedding 2.40%, 2.36%, and 2.35% of their respective market shares, while DeFi and CeFi shares also contracted by 2.19% and 2.15%.
Market analysts said rising expectations of a Federal Reserve rate hike this week are tightening financial conditions and weighing on Bitcoin and the broader crypto market.
US inflation for August came in hotter than expected, with core consumer price index (CPI) rising about 0.3% month over month, above consensus, and energy prices climbing as Brent crude moved above $100 per barrel.
This pushed CME and futures-based measures of September hike odds into the low- to mid-80 per cent range, with several major banks now forecasting a 25-basis-point move at the September 15 to 16 meeting, as reported by Goldman Sachs and others in recent coverage of Fed expectations.
TradeFi articles note that Fed officials have become more vocal about the need to reassert inflation-fighting credibility, and core PCE has been stuck above 3 per cent this year, reinforcing the case for at least one hike.
Higher policy rates and near-5 per cent long-dated Treasury yields make yield-bearing assets more attractive relative to Bitcoin (BTC) and other non-yielding crypto, encouraging some investors to rotate out of risk assets.
Over the last 24 hours, total crypto market cap is down about 0.79 per cent to 2.63 trillion dollars, with 24-hour spot and derivatives volumes sharply lower, indicating cautious positioning.
Bitcoin has repeatedly failed to break the $80,000 zone, with recent pullbacks toward the mid-$70,000s tied directly to spikes in hike odds and bond yields rather than crypto-specific news, and spot ETFs have seen several days of net outflows that mechanically add selling pressure.
Higher rate expectations have also hit high beta names like XRP harder, where recent drops have outpaced BTC and Ethereum according to multiple market reports.
The immediate catalyst is the Fed’s decision and press conference, including how firmly it signals further hikes beyond this week rather than a one-time adjustment.
If the Fed hikes but delivers relatively dovish guidance, yield pressure could ease, bond markets may stabilise, and crypto ETF flows could turn positive again, offering relief to BTC and large caps.
If the Fed leans hawkish on future tightening, elevated yields could persist, keeping passive flows into bonds strong and extending the period where crypto trades under macro headwinds.
Rising Fed hike odds have shifted the market’s focus back to inflation, yields, and policy risk, and crypto is feeling that squeeze through weaker flows and hesitation near key price levels. Bitcoin Price Slides to $77.2k on Institutional Exits
