The global digital assets market printed red indexes on Tuesday as the biggest cryptos like Bitcoin (BTC) and Ethereum (ETH) price dropped by over 3%. BTC price fell under the $67K level and marked its lowest level in June as markets prepare themselves for a critical US inflation report and the Federal Reserve’s policy announcement.
Crypto began to tumble
As per reports, Crypto stocks also recorded a decline with bitcoin miners Riot Platforms and Marathon Digital trading down by 2.8% and 3.5%, respectively. Crypto exchange Coinbase price fell by over 3.5% in the last 24 hours as bitcoin slid 3.7%. However, General Motors gained 1.3% after announcing a $6 billion share buyback plan.
Wall Street was also set to open lower on Tuesday with futures for all three major indexes in the red. The S&P 500 and Nasdaq had posted record highs on Monda. It was boosted by Nvidia’s 10 for one stock split.
However, investor sentiment remained cautious ahead of the release of the Consumer Price Index (CPI) report for May and the conclusion of the Fed’s two-day policy meeting on Wednesday.
“There’s an abnormal amount of anxiety around these numbers and around the Fed meeting, particularly after the jobs report on Friday,” says expert. The central bank is not expected to change interest rates but will release updated economic projections and the “dot plot,” which shows policymakers’ expectations for future rate movements.
What to expect?
The CPI figures and the Fed’s projections are critical as recent economic reports have provided mixed signals about the economy’s health. “If they (Fed policymakers) take down growth a bit, then they will have cover to keep two dots on the dot plot, which would be very bullish for markets. So this trepidation you’re seeing is a fear of what if that doesn’t happen,” Hayes added.
Markets are currently pricing in a nearly 53% chance of the Fed’s first rate cut occurring in September, according to the CME’s FedWatch tool. Rate futures now imply only one cut this year, down from two before Friday’s strong Nonfarm Payrolls data.
In premarket trading, Nvidia edged 0.3% lower, while Apple fell 0.2% following an underwhelming AI strategy presentation at its developer conference. Other major tech stocks, including Microsoft, Meta Platforms, and Amazon, slipped between 0.2% and 0.3%.
