Crypto Drops $40B Ahead of Powell’s Final Fed Meeting

Crypto markets fell about $40 billion Tuesday as traders reduced exposure ahead of the Federal Open Market Committee meeting chaired by Jerome Powell. Bitcoin dipped below $76,000 and total crypto market capitalization declined 1.8% to roughly $2.62 trillion.

CME Group’s FedWatch tool showed a 100% probability that the Fed would hold its policy rate at 3.50% to 3.75% at the April 29 meeting. Powell’s press conference remained the main focal point for investors seeking guidance on the timing of any future rate cuts. Powell is scheduled to leave the Fed in mid-May, when Kevin Warsh will take over as chair.

Price data showed broad losses across major tokens. Ether fell about 2%, XRP dropped 2.2% and BNB eased 0.7% over 24 hours. The pullback coincided with reduced positions in leveraged perpetual contracts and an increase in crypto inflows to exchanges.

An analyst pointed to large transfers into trading platforms as evidence of intentional repositioning, writing, “Nearly 10K BTC hit exchanges in a single day while whale inflows made up over 70% of deposits. Tbh thats not random activity thats size moving with intent.” Market participants have noted that Bitcoin and many altcoins often drift lower in the day before Fed decisions.

Headline inflation readings around 3.3% to 3.5%, partly attributed to higher oil prices amid tensions in Iran and the Middle East, have reduced expectations for immediate rate cuts. Treasury yields ticked up, with the 10-year around 4.33% to 4.36%, and the dollar remained firm on safe-haven flows.

Federico, an executive at crypto exchange Phemex, commented that attention would shift to Powell’s remarks for signals on future policy, noting the trade-off between price stability and growth. A market participant wrote that traders were derisking ahead of the meeting and expected a larger directional move later in the week once the Fed’s tone became clearer.

Traders and volatility models were braced for higher swings during Powell’s afternoon press conference, with market participants watching for any indications that could influence crypto positioning in the days after the FOMC.