A renewed flight from risk across Asian financial markets spread into cryptocurrencies on Tuesday, pushing Bitcoin below $64,000 and producing heavier losses across ether and several large alternative tokens.
The market retreat gathered momentum as investors confronted two immediate concerns. Expectations of a possible U.S. interest-rate increase were rising before the Federal Reserve’s policy announcement, while an accelerating semiconductor selloff raised doubts about artificial intelligence spending, technology valuations and the financing required to build new data centers.
At around 11:21 a.m. UAE time, Bitcoin traded at $$63,458.53. The world’s largest cryptocurrency was down 2.91 percent over 24 hours and 3.49 percent over seven days.
Bitcoin’s market capitalization stood at $1.27 trillion, while its 24-hour trading volume reached $28.08 billion. The decline took the token close to its weakest price in almost two weeks as investors reduced exposure to speculative assets before the Fed decision.
Selling activity accelerates
Total cryptocurrency market capitalization stood at approximately $2.17 trillion, representing a 3 percent decline from the previous day.
Market turnover moved sharply in the opposite direction. Total 24-hour trading volume increased 44.99 percent to $69.62 billion, indicating that selling, liquidations and portfolio repositioning accelerated as prices declined.
Decentralized finance transactions accounted for $9.76 billion, equivalent to 14.01 percent of total cryptocurrency market turnover. Bitcoin dominance stood at 58.63 percent, showing that the asset retained close to three-fifths of the market’s overall capitalization.
The latest decline reversed part of Monday’s recovery, when Bitcoin moved back above $65,000 and ether gained more than 3 percent as falling oil prices eased immediate inflation fears. That improvement proved short-lived once Asian technology markets opened sharply lower and traders returned their attention to monetary-policy risks.
Bitcoin’s performance also showed that the cryptocurrency market remained closely connected with global risk sentiment. Although digital assets trade continuously, major moves in technology stocks, Treasury yields and the dollar frequently influence demand from institutional and leveraged investors.
Fed risk rises
The Federal Reserve began its two-day July policy meeting on Tuesday. The central bank’s official calendar confirms that the meeting is being held on July 28 and 29, with the policy statement scheduled for Wednesday at 2 p.m. Eastern time and a press conference at 2:30 p.m.
Financial markets were assigning an approximately 38 percent probability to a quarter-percentage-point rate increase, according to Reuters. The relatively high likelihood of immediate tightening reflected concern that inflation could remain elevated despite the recent retreat in oil prices.
Higher interest rates generally weaken demand for cryptocurrencies and other non-yielding assets by increasing the returns available from cash, government bonds and other lower-volatility investments.
Tighter monetary policy can also strengthen the U.S. dollar and raise borrowing costs, reducing liquidity available for speculative trading. Smaller cryptocurrencies frequently experience greater losses than Bitcoin during such periods because they have thinner markets and higher perceived risk.
Investors will therefore examine both the Fed’s decision and its guidance on September. Even an unchanged rate could pressure cryptocurrencies if policymakers signal that further tightening remains likely.
AI selloff spreads
Pressure intensified as Asian semiconductor stocks suffered their steepest declines in months amid concerns about AI financing, stretched valuations and stronger competition from China.
South Korea’s KOSPI plunged nearly 10 percent and triggered market circuit breakers, while Japan’s Nikkei dropped approximately 4 percent. SK Hynix, Samsung Electronics and several Japanese semiconductor companies recorded sharp losses.
The selling followed a 5 percent decline in Nvidia after reports that the chipmaker was considering backing approximately $250 billion in financing connected to an OpenAI data-center project. Investors questioned whether AI suppliers were taking on growing financial exposure to support demand for their own hardware.
Bitcoin’s decline accelerated after U.S. markets closed as the Asian equity rout deepened. The token fell to around $63,200 during the session, while losses spread across other major cryptocurrencies.
The synchronized retreat suggested that traders viewed cryptocurrencies as part of the same high-risk allocation as growth stocks and semiconductor shares rather than as protection from technology-sector volatility.
ETF demand weakens
Institutional demand also remained fragile. U.S.-listed spot Bitcoin exchange-traded funds recorded net outflows of $225.1 million on July 23 and $240.1 million on July 24, producing a combined two-session withdrawal of $465.2 million.
The withdrawals ended a seven-session inflow streak. BlackRock’s IBIT accounted for most of the late-week selling, recording combined withdrawals of approximately $414.7 million across the two sessions.
The products still generated approximately $33.8 million in net inflows over the full week, marking their third consecutive weekly increase. However, the small total indicated that institutional buyers were returning cautiously rather than providing the sustained demand generally associated with a stronger market recovery.
The pressure continued on Monday, when Farside Investors recorded a further $11.6 million net outflow from U.S. spot Bitcoin ETFs. BlackRock’s fund lost $8.8 million, while Fidelity’s product recorded a $2.8 million withdrawal.
The latest price decline therefore occurred without a strong institutional cushion. Continued ETF withdrawals could leave Bitcoin more dependent on exchange-based traders and short-term macroeconomic sentiment.
Technical pressure builds
Bitcoin’s Tuesday low near $63,400 marked its weakest level in 11 days and brought several closely watched technical levels back into focus.
Analysts cited in a Bloomberg report identified $62,000 as the next potential downside level, followed by stronger support around $60,000.
IG Australia analyst Tony Sycamore maintained a neutral outlook and said Bitcoin would need to produce a sustained break and close above its 200-day moving average, then around $72,001, to reduce medium-term downside risk and establish a more constructive technical picture.
A decline below $62,000 would place Bitcoin closer to levels reached during June’s broad risk selloff. A break through $60,000 could also intensify selling by triggering stop-loss orders, leveraged liquidations and further reductions in institutional exposure.
Conversely, a softer Fed message could weaken the dollar and reduce Treasury yields, potentially helping Bitcoin stabilize. The market’s immediate direction remains dependent on whether Wednesday’s policy announcement reinforces or reduces expectations for higher U.S. rates.
Major coins retreat
Ether traded at $1,882.07, falling 4.18 percent over 24 hours and 2.38 percent during the previous seven days. Its market capitalization stood at $227.27 billion, while daily trading volume reached $13.90 billion.
BNB declined 1.57 percent to $565, while XRP dropped 4.50 percent to $1.0568. Solana lost 4.12 percent to trade at $73.326.
TRON fell 2.29 percent to $0.324755. Hyperliquid suffered one of the steepest declines among the largest cryptocurrencies, sinking 7.78 percent to $55.112, while Dogecoin slid 3.89 percent to $0.070038.
The heavier losses in ether, XRP, Solana and Hyperliquid showed that investors were reducing exposure more aggressively outside Bitcoin. The decline in Bitcoin dominance was limited, suggesting that the session represented broad deleveraging rather than a significant rotation between major digital assets.
UNUS SED LEO gained 0.23 percent to $9.7523, making it one of the few large cryptocurrencies to advance during the selloff.
Altcoins fall broadly
Zcash fell 6.73 percent to $467.87, while Monero declined 2.61 percent to $340.99. Chainlink lost 5.50 percent to trade at $8.342.
Stellar dropped 5.20 percent to $0.17243, Cardano fell 6.01 percent to $0.1563 and Canton declined 3.09 percent to $0.11922.
Bitcoin Cash slipped 2.10 percent to $212.83, while Litecoin lost 2.49 percent to $46.26.
Hedera fell 1.94 percent to $0.06822 but remained 1.68 percent higher over seven days. Avalanche declined 3.81 percent to $6.44, while Sui dropped 5.05 percent to $0.6796.
Shiba Inu tumbled 9.05 percent to $0.00000469, making it one of Tuesday’s weakest major tokens. Despite the sharp daily fall, it retained a seven-day gain of 8.71 percent following its earlier advance.
Cronos declined 4.34 percent to $0.05517, while Uniswap lost 3.79 percent to trade at $3.7136.
DeFi tokens slide
NEAR Protocol led the major declines with a 10.18 percent fall to $1.6692. The double-digit retreat showed that smaller and more volatile assets remained particularly exposed to the deterioration in market sentiment.
Bittensor dropped 5.47 percent to $188.17, while Ondo fell 4.48 percent to $0.39160.
OKB edged 0.01 percent higher to $86.56, making it another rare positive performer during the session.
World Liberty Financial slipped 0.05 percent to $0.0550, while Aster declined 0.74 percent to $0.6228. MemeCore fell 3.18 percent to $1.18060.
Aave lost 3.06 percent to $98.04, while Mantle dropped 3.48 percent to $0.4006. Polkadot declined 5.47 percent to $0.767 and Sky fell 3.11 percent to $0.05579.
The broader picture remained defensive, with only a limited number of assets recording gains. Double-digit weekly losses across Hyperliquid, Zcash, Cardano, Sui, NEAR and Sky indicated that risk appetite had deteriorated most sharply outside Bitcoin.
Stablecoins hold firm
Major stablecoins remained close to their intended dollar pegs despite the increase in market volatility.
Tether traded at $0.9994, while USDC stood at $1.0010. Dai was valued at $0.99965, and World Liberty Financial USD traded at $0.9999.
Ethena USDe stood at $1.001, Global Dollar at $0.9999 and PayPal USD at $1.0005. Ripple USD traded at $1.00110, while USDD remained at $1.0000.
The relative stability of the largest dollar-linked tokens indicated that the selloff was concentrated in volatile cryptocurrencies rather than producing widespread disruption to stablecoin pricing.
Gram, previously known as Toncoin, fell 3.99 percent to $1.5601. The token was renamed from Toncoin to Gram in June 2026, returning to the name originally associated with Telegram’s early blockchain plans.
Gold-backed cryptocurrencies also weakened as international bullion prices declined. Tether Gold and PAX Gold each fell 1.09 percent, trading at $4,041.90 and $4,043, respectively.
Read more: Bitcoin rises 1.03 percent to $65,106 as Ether jumps 3.87 percent before Fed
Quarterly weakness persists
Tuesday’s decline followed a difficult second quarter for the cryptocurrency sector. The CoinGecko 2026 Q2 Crypto Industry Report showed that total market capitalization contracted 12.6 percent to $2.1 trillion by the end of June.
The market lost approximately $304.8 billion during the quarter. Bitcoin fell 14.2 percent, while ether declined 25.4 percent, demonstrating that alternative cryptocurrencies experienced substantially greater pressure than the market leader.
Average daily trading volume dropped 20.9 percent to $93.1 billion. Spot trading across the 10 largest centralized exchanges fell 27.9 percent to $1.95 trillion, with May producing the quarter’s weakest monthly activity.
Stablecoin capitalization declined 1.6 percent to $305.1 billion, marking its first quarterly contraction since the third quarter of 2023. CoinGecko said the decline provided evidence that capital was leaving the cryptocurrency ecosystem rather than simply rotating between volatile tokens and stablecoins.
The latest market capitalization of $2.17 trillion remains slightly above the quarter-end level. However, Tuesday’s selloff showed that the recovery has not yet developed into a decisive trend reversal.
Leverage remains lower
The structure of the derivatives market also indicates that speculative positioning remains below earlier peaks.
CoinGecko’s State of Crypto Perpetuals Report 2026 showed that total cryptocurrency perpetual-futures open interest declined from $120.35 billion at the beginning of 2025 to $99.09 billion by the end of April 2026. It remained more than 50 percent below its October 2025 peak of $210.02 billion.
Lower open interest can reduce the scale of forced liquidations compared with more highly leveraged periods. However, it also reflects weaker speculative participation and reduced willingness among traders to maintain large directional positions.
Decentralized perpetual exchanges increased their share of total open interest to 13.5 percent, led by Hyperliquid. That growth makes the sharp 7.78 percent decline in Hyperliquid’s token particularly relevant because the platform has become an important part of the leveraged trading ecosystem.
A separate CoinGecko trading activity report found that combined cryptocurrency perpetual volume increased 75 percent from $4.14 trillion in January 2024 to $7.24 trillion in January 2026.
The expansion shows that derivatives remain central to cryptocurrency price formation even as outstanding leverage has declined from its peak.
The Fed decision now represents the market’s most immediate test. An unchanged rate accompanied by cautious guidance could reduce pressure on cryptocurrencies, particularly if Treasury yields and the dollar decline.
Wednesday sets direction
A surprise rate increase or a strongly hawkish statement could instead push Bitcoin toward the $62,000 support area and deepen losses among smaller tokens.
The market will also remain sensitive to earnings from major U.S. technology companies. Weak evidence of returns from AI infrastructure spending could extend the semiconductor selloff and maintain pressure on cryptocurrencies through their connection with growth-oriented risk assets.
