The cryptocurrency market faced renewed selling pressure today as investors reacted sharply to the U.S. Federal Reserve’s latest aggressive interest rate hike. With rates rising by 75 basis points—marking the third consecutive increase of this magnitude in 2025—market sentiment across digital assets turned bearish. The Fed's clear stance on prioritizing inflation control over short-term economic stability has triggered a broad selloff in risk-on assets, including cryptocurrencies.
Bitcoin, the leading digital currency and benchmark for the crypto market, dropped over 3% to trade near $18,627. At one point, it came dangerously close to slipping below the psychologically significant $18,000 level. Meanwhile, Ether, the native token of the Ethereum blockchain and the second-largest cryptocurrency by market cap, saw even steeper losses, falling more than 6% to $1,260.
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According to data from CoinGecko, the total cryptocurrency market capitalization remained under $1 trillion, down more than 2% over the past 24 hours to approximately $943 billion. This sustained pressure reflects growing investor caution amid tightening monetary policy and heightened macroeconomic uncertainty.
Why Are Crypto Markets Reacting So Strongly?
The Federal Reserve’s latest move reinforces its commitment to bringing inflation under control—even at the cost of economic slowdown. Higher interest rates reduce liquidity in financial systems, making yield-bearing traditional assets like bonds more attractive compared to volatile, non-yielding assets such as cryptocurrencies.
Edul Patel, CEO and Co-founder of Mudrex, explained:
“Bitcoin, Ethereum, and most cryptocurrencies traded lower on late Wednesday after the Federal Reserve raised interest rates by 75 basis points—marking the third consecutive time this year. BTC continues to struggle below the $19,000 level since bears are more powerful than bulls in the market.”
He added that Ethereum has been particularly vulnerable post-Merge due to ongoing token dumping by former miners, combined with adverse macroeconomic conditions. “If the selling pressure from miners increases, ETH is likely to fall below the $1,000 level,” Patel warned.
Major Cryptocurrencies in Decline
Beyond Bitcoin and Ether, nearly all major digital assets recorded losses over the past day:
- Dogecoin fell around 3% to $0.05
- Shiba Inu dipped over 1% to $0.000011
- XRP, Solana, Cardano, Polygon, Avalanche, Litecoin, Chainlink, Polkadot, and Tron all registered declines
- Stablecoins like Tether and Binance USD held their pegs but saw reduced trading volumes
This widespread downturn underscores the interconnected nature of the crypto ecosystem, where sentiment shifts can rapidly cascade across projects regardless of individual fundamentals.
The Exception: Uniswap Defies Trend
Amid the broad selloff, Uniswap (UNI) emerged as a rare gainer. The decentralized exchange token rose in value despite overall market weakness—a sign of growing confidence in decentralized finance (DeFi) infrastructure even during bearish cycles.
Uniswap’s resilience may be attributed to increased on-chain activity, including rising trading volume and liquidity provision on its platform. As users continue to engage with DeFi protocols for swaps, yield farming, and governance, UNI benefits from both utility demand and speculative interest.
Broader Market Context: A Challenging Year for Crypto
The current downturn occurs against a backdrop of prolonged bearish momentum. Since peaking at nearly $3 trillion in late 2021, the crypto market has erased over **$2 trillion in value**. This collapse has been fueled not only by macroeconomic headwinds but also by high-profile failures within the industry.
Notable collapses include:
- Three Arrows Capital, a once-prominent crypto hedge fund that defaulted on loans and filed for bankruptcy
- Terraform Labs, whose algorithmic stablecoin Terra (UST) imploded in May 2022, wiping out tens of billions in market value
- Legal actions against co-founder Do Kwon, who remains under investigation by multiple international authorities
These events have eroded trust and intensified regulatory scrutiny, further dampening investor enthusiasm.
Core Keywords Driving Market Sentiment
Understanding today’s crypto price action requires attention to several key factors:
- Cryptocurrency prices are highly sensitive to changes in monetary policy.
- Bitcoin remains the market leader and primary indicator of risk appetite.
- Ether is influenced by both macro trends and network-specific developments like post-Merge supply dynamics.
- Market cap levels reflect overall investor confidence.
- Federal Reserve rate hikes directly impact capital flows into speculative assets.
- DeFi tokens like Uniswap show resilience when fundamentals remain strong.
- Macroeconomic factors continue to dominate short-term price movements.
- Crypto volatility persists due to low liquidity and sentiment-driven trading.
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Frequently Asked Questions (FAQ)
Why did Bitcoin drop below $19,000?
Bitcoin fell below $19,000 due to renewed selling pressure following the Federal Reserve’s 75-basis-point rate hike. Higher interest rates reduce investor appetite for risky assets, leading to capital outflows from crypto markets.
Is Ether likely to fall below $1,000?
While not guaranteed, some analysts believe Ether could test $1,000 if selling pressure from former miners continues and macroeconomic conditions worsen. However, long-term support remains tied to Ethereum’s adoption in DeFi and Web3 applications.
Why is Uniswap gaining when other cryptos are falling?
Uniswap’s price increase suggests strong underlying demand for its decentralized exchange platform. Rising on-chain activity, governance participation, and confidence in DeFi resilience may be driving investor interest despite broader market weakness.
How do Federal Reserve decisions affect cryptocurrency prices?
The Fed’s monetary policy influences liquidity and risk tolerance. Rate hikes make traditional investments more attractive and increase borrowing costs, reducing speculative investments—including cryptocurrencies.
What is the current total crypto market cap?
As of today, the global cryptocurrency market capitalization stands at approximately $943 billion—down over 2% in the last 24 hours—and remains below the $1 trillion threshold.
Are we still in a crypto bear market?
Yes. With total market value down over $2 trillion from its 2021 peak and major assets trading significantly below all-time highs, the market remains in a bear phase characterized by low sentiment and periodic volatility.
Looking Ahead: What Investors Should Watch
Market participants should closely monitor upcoming economic indicators such as CPI data, employment reports, and Fed commentary for clues about future rate trajectories. Additionally, on-chain metrics—including exchange outflows, whale movements, and miner behavior—can provide early signals of potential reversals.
For long-term investors, periods of extreme volatility often present strategic entry points—especially in fundamentally sound projects with active development and user adoption.
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