Bitcoin and Ethereum Drop as Fed Rate Hike Probability Hits 90%

Market sentiment shifted toward risk aversion as the probability of a 0.25 percentage point interest rate hike by the U.S. Federal Reserve reached 90%, reflecting growing concerns over monetary policy shifts rather than mere price declines.

The Fed is set to decide on interest rates during its September 15-16 meeting, with futures markets pricing in the likelihood of a first increase since 2023. This signals that market expectations for tighter liquidity are outweighing hopes for continued easing.

Bitcoin fell 3.66% to $76,090 and Ethereum dropped 4.99% to $2,413 over the past 24 hours as major cryptocurrencies faced pressure from rising interest rate concerns. Altcoins saw steeper declines: XRP fell 10.74%, Solana dropped 5.02%, Dogecoin slid 4.44%, Hyperliquid declined 5.17%, and Tron eased 2.23%.

Bitcoin's market share rose to 59.02% from 59.02% the previous day, while Ethereum's share fell to 11.37% from 11.52%. This suggests capital remained relatively stable in Bitcoin during the downturn compared to other assets.

Total crypto market volume reached $10.31 billion over the past 24 hours, with derivatives trading volume surging 27.55% to $95.83 billion. Liquidations totaled $671.29 million, of which 72.88% were long positions. Ethereum saw the largest liquidation at $301.94 million, followed by Bitcoin at $247.28 million.

DeFi trading volume increased 15.55% to $12.4 billion, while stablecoin trading rose 29.09% to $106 billion. The data points to heightened risk aversion and a shift toward liquidity as market participants adjusted positions ahead of the Fed meeting.