Bitcoin Falls Below $80K as Investors Reduce Risk Before Fed Decision

Bitcoin dropped nearly 2% to around $79,800 during Asian trading on Monday as investors reduced exposure to riskier assets ahead of this week’s Federal Reserve meeting. Renewed weakness in AI-related stocks across Asia added further pressure to the cryptocurrency market, with Ether and XRP recording some of the steepest losses among major tokens.

Most leading cryptocurrencies traded lower. Ether declined nearly 3% to slightly above $2,300, while XRP fell about 3% to $1.28. Solana lost 2%, hovering just above the $100 level. DOGE, ZEC, HYPE and BNB each slipped between 1% and 2%. TRX was the only major cryptocurrency in positive territory, gaining less than 1%, according to CoinDesk data.

Jeff Mei, chief operating officer at crypto exchange BTSE, said investors appeared to be reducing risk as Bitcoin fell below $80,000 ahead of the Fed’s policy announcement.

In comments to CoinDesk, Mei said markets were focused on the central bank’s decision and the possibility that Chair Kevin Warsh could signal a December rate increase. Although the Fed is widely expected to leave interest rates unchanged this week, its guidance on future policy could have a significant impact on cryptocurrency prices.

Mei added that elevated oil prices, intensifying tensions between the United States and Iran, and persistent inflation could prompt the central bank to adopt a more hawkish stance. Higher interest rates and tighter liquidity would generally create additional headwinds for cryptocurrencies and equities.

Fed Decision and December Rate Outlook in Focus

The Federal Reserve is scheduled to announce its policy decision on Wednesday. Investors will closely examine Warsh’s subsequent press conference for clues about whether another rate increase could be on the table in December.

Higher borrowing costs typically reduce the appeal of speculative investments by making financing more expensive and potentially directing capital toward less risky assets. This dynamic can put pressure on cryptocurrencies and technology stocks.

Asian AI Selloff Adds Pressure to Crypto Markets

The downturn in artificial intelligence stocks continued across Asian markets, reinforcing concerns about risk appetite among investors.

South Korea’s Kospi fell 1% after Goldman Sachs strategists reduced their 12-month target for the index by 25%. The benchmark is closely watched as an indicator of AI-related sentiment because major semiconductor manufacturers, including Samsung Electronics, account for a significant share of its market capitalization.

Japanese chipmakers were among the biggest decliners on the Nikkei, while Chinese companies developing AI models also recorded losses. Nasdaq 100 futures slipped 0.1% as investors prepared for earnings reports from major US technology companies later this week.

The MSCI Asia Pacific Index declined 0.1%, struggling to recover after four consecutive weeks of losses. That marks its longest losing streak since April.

Oil Retreat Offers Some Relief to Markets

Oil prices eased, providing a measure of relief to financial markets. Brent crude fell 2% from a six-month high to approximately $114 per barrel after President Donald Trump said a decision was approaching on whether to pursue an agreement with Iran or resume military strikes.

US Treasury prices also advanced.

Despite the broader market weakness, Bitcoin’s next technical milestone remains the $82,500 level. The cryptocurrency lost that price threshold last Thursday, and a recovery above it could help buyers demonstrate that the latest decline is only a temporary pullback rather than the start of a deeper correction.

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