Bitcoin and XRP remained under pressure on Tuesday, despite another decline in oil prices and signs that tensions between the United States and Iran may be easing.
Both cryptocurrency and stock markets experienced renewed selling as investors focused on divisions within the Federal Reserve. Traders are increasingly concerned that stronger support for tighter monetary policy could increase the likelihood of a September interest-rate hike.
Fed Divisions Fuel Rate-Hike Concerns
Investors are closely watching how Federal Reserve officials vote during the latest two-day Federal Open Market Committee meeting.
Markets currently expect a 10-2 vote, with two policymakers reportedly supporting a 25-basis-point rate increase. However, concerns are growing that more officials could vote in favor of tighter policy following the divisions revealed in the June meeting minutes.
More than three dissenting votes could strengthen expectations for a September rate hike, even if the Fed leaves rates unchanged at its current meeting.
According to the CME FedWatch Tool data cited in the report, traders see a 56% chance of a 25-basis-point increase in September.
Analysts Remain Divided on Fed Policy
Financial institutions have offered different forecasts for the direction of US interest rates.
T. Rowe Price expects the Federal Reserve to keep rates unchanged over the next 12 months. Meanwhile, Citadel Securities reportedly believes Fed Chair Kevin Warsh could announce a rate increase as policymakers respond to persistent inflationary pressure.
President Donald Trump has continued to call on the Federal Reserve to lower interest rates.
At the same time, Trump said the United States was holding constructive talks with Iran aimed at ending the conflict. Discussions involving Iran and Oman also reportedly made progress regarding the management and reopening of the Strait of Hormuz.
Oil Falls Below $80 as Geopolitical Risks Ease
Oil prices declined by another 3% after signs of a possible reduction in US-Iran tensions. Crude prices dropped below $80 per barrel ahead of the Federal Reserve’s upcoming policy decision.
The US Dollar Index remained near 101.6, while the 10-year Treasury yield slipped to approximately 4.622%. The yield had previously reached an 18-month high during the prior week.
Lower oil prices would normally help ease inflation concerns. However, the improvement was not enough to support Bitcoin or the wider cryptocurrency market.
Bitcoin Drops as Futures Activity Weakens
Bitcoin fell by more than 3% and traded near $63,320. The cryptocurrency recorded a 24-hour low of approximately $63,016.
Trading volume increased by 24%, indicating stronger market activity as investors reduced their exposure.
Weakness was also visible in the derivatives market. Total Bitcoin futures open interest declined by more than 2% to around $47.46 billion over the previous 24 hours.
Bitcoin futures open interest on CME fell by more than 2.70%, while Binance recorded a decline of approximately 1.55%.
Falling open interest often suggests that traders are closing leveraged positions. However, it does not independently confirm whether the market has reached a bottom.
XRP Falls More Than 5%
XRP experienced an even sharper decline, falling by more than 5% to trade near $1.05.
The drop came amid wider cryptocurrency market weakness and continued uncertainty surrounding delays to the CLARITY Act. XRP trading volume jumped by 74% as investors increased their selling activity.
XRP futures open interest declined during the latest hour but remained approximately 1.15% higher over the full 24-hour period. Binance recorded a 0.85% decrease in XRP open interest during the most recent trading hours.
These mixed figures suggest that trader sentiment remains uncertain.
XRP ETF Inflows Lose Momentum
Inflows into XRP exchange-traded funds also slowed to approximately $592,470.
Meanwhile, Grayscale stated that flows into spot HYPE ETFs were growing faster than those of Bitcoin, Ethereum, Solana and XRP when measured relative to each asset’s market capitalization.
Bitcoin and XRP could remain volatile as investors assess the Federal Reserve’s policy decision, inflation risks and developments in the US-Iran conflict.
Although falling oil prices may reduce some inflationary pressure, concerns about tighter monetary policy continue to weigh on risk assets.
