Bitcoin dropped nearly 2% to around $79,800 on Monday morning in Asia as traders reduced risk ahead of the Federal Reserve’s meeting scheduled for Wednesday. The sell-off extended to other major cryptocurrencies, with Ether falling nearly 3% to just above $2,300, and XRP losing about 3% to $1.28. SOL slid 2% and is barely holding $100, while DOGE, ZEC, HYPE, and BNB each fell 1% to 2%. TRX was the only major token in the green, up less than 1%.
The market’s cautious tone comes as investors await signals from the Fed about a possible December rate increase, which could tighten liquidity and further pressure cryptocurrencies and stocks. Jeff Mei, chief operating officer at crypto exchange BTSE, noted in an email to CoinDesk that while the Fed is unlikely to change rates this week, traders are closely watching for hints about a December hike. He added that record high oil prices, the escalating US-Iran conflict, and inflation could push the Fed to adopt an aggressive tone, leading to higher rates and reduced liquidity for crypto and stocks.
The broader market sentiment was also weighed down by a continuing sell-off in Asian technology shares, particularly in the AI sector. South Korea’s Kospi fell 1% after Goldman Sachs strategists cut their 12-month target for the index by 25%. Chip stocks were the biggest losers on Japan’s Nikkei, and Chinese AI model developers slumped. Nasdaq 100 futures slipped 0.1% as investors braced for earnings from the biggest U.S. tech companies this week.
For Bitcoin to regain confidence among buyers, it needs to reclaim the $82,500 level, which it lost last Thursday. The MSCI Asia Pacific Index fell 0.1%, struggling to recover from four straight weeks of losses, its longest losing run since April. Oil prices provided some relief, with Brent crude falling 2% from a six-month high to about $114 a barrel after President Donald Trump hinted at a potential decision on Iran.