Crypto markets experienced a broad sell-off following the latest Federal Reserve policy decision, with Bitcoin falling over 5% and Ethereum dropping more than 6%. Chair Jerome Powell reinforced a data-dependent stance, noting elevated inflation and geopolitical risks. This strengthened the “higher-for-longer” interest rate narrative, which typically pressures risk assets, leading to a synchronized decline across major tokens as investors repositioned.
Cryptocurrency markets turned sharply lower after the Federal Reserve’s latest policy update, with major assets posting broad losses. Data showed widespread selling pressure, with large-cap tokens leading the decline.
Bitcoin fell over 5%, while Ethereum dropped more than 6%. XRP declined by around 5.3%, Solana slipped 5.7%, and BNB recorded a 3.7% loss.
The sell-off extended across altcoins, underscoring a broad risk-off move. Market reaction was driven by Chair Jerome Powell’s press conference and the central bank’s updated projections.
Powell reiterated that inflation remains elevated and warned that rising energy prices could keep pressure high. He noted that headline PCE inflation stood at 2.8%, with core inflation at 3.0%, both above the Fed’s 2% target.
Crucially, Powell made clear that policy is not on a preset path and the Fed will remain data-dependent. This reinforced the view that rate cuts are not imminent, a key trigger for the pullback.
The Fed’s projections strengthened the “higher-for-longer” narrative, which tends to weigh on speculative assets. For crypto markets, this creates a challenging short-term setup with constrained liquidity and delayed rate cuts.
The scale of the sell-off highlights how closely crypto markets are tied to macroeconomic signals. The synchronized decline suggests traders are repositioning in response to shifting policy expectations rather than asset-specific news.
With the Fed offering no clear timeline for easing, markets will remain highly reactive to incoming data. Inflation readings, labour market updates, and geopolitical developments will play a critical role in shaping future policy expectations.
