"RBC-Crypto" does not provide investment advice, the material is published for informational purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.
The price of bitcoin fell to $63K during the Asian trading session on the night of July 28. The drop occurred against the backdrop of investor concerns about the prospect of tighter monetary policy in the US, as reported by Bloomberg citing interviewed experts.
On the eve of the interest rate decision by the US Federal Reserve (Fed), which will be announced on July 29, experts pointed to macroeconomic risks, as well as weakness in the market for US exchange-traded funds (ETFs) based on the first cryptocurrency. Analysts also noted the risks of overvaluation in the artificial intelligence market.
As of 12:15 Moscow time on July 28, Bitcoin (BTC) is trading above $63.3K, having lost about 3.5% from its peak the day before. Ethereum (ETH) has lost more than 5% over the same period and is trading above $1.88K. The total cryptocurrency market capitalization stands at $2.17 trillion, with losses over the past 24 hours reaching almost 3%.
According to Bloomberg, key investor concerns are related to a possible increase in the Fed's key rate. The largest market-making company, Citadel, predicts an unexpected quarter-percentage-point rate hike, citing the fight against rising US inflation.
The overall market consensus regarding the rate change does not reflect Citadel's expectations. According to the CME's FedWatch Tool, which reflects the probability of changes based on a broad set of market data and interbank rates, markets expect the rate to remain unchanged (range 3.5–3.75%) with a 66% probability.
The attention of crypto traders to the topic of Fed rate changes is confirmed by trading volumes on the prediction market Polymarket, where the indicator reached almost $110 million. Despite the huge trading interest in prediction markets, determining probability on Polymarket and FedWatch differs in nature: the indicators of the former depend on the amount of bets, while FedWatch's are based on real data in the interbank sector.
If Citadel's expectations are realized, the market picture for bitcoin, which is perceived by markets as a risk asset, will worsen. A higher rate makes it more difficult for investors to access cheaper capital, and in this case, investors are attracted to instruments with stable yields, such as US government bonds.
Anticipating such a scenario, Bloomberg experts assessed the probability of a further drop in the bitcoin price to $62K levels, noting strong support around $60K.
Experts from IG Australia noted the technical picture as the main indicator of interest in bitcoin. It is indicated that "a sustained breakout and close above the 200-day moving average is still needed to form a more constructive technical picture." This trend line is currently around $72K.
Bitcoin ETFs and Regulation
The weakness of the crypto market is also highlighted by inflows into Bitcoin ETFs. Although the funds showed a predominantly positive trend from the beginning of July—with capital inflows of $222 million as of July 28—they recorded outflows of over $465 million in the last two days of the past trading week.
The inflows coincided with a rise in the bitcoin price, when it gained over 15% by July 23, rising above $66K.
In addition, US lawmakers postponed a decision on the key CLARITY Act document. As reported by Coindesk, work on it has been delayed due to regulators working on other bills, including sanctions against Russia. Appointments to federal positions are also a priority.
American lawmakers are going on summer recess in early August. The adoption of the CLARITY Act is seen by many experts as a bullish signal for the crypto market in general and bitcoin in particular. Thus, expectations of positive news may shift to the fall of 2026. Interestingly, quite a few key crypto market participants expect a reversal from the bearish trend to growth precisely in the fall of this year.
end-content
