The crypto market is drifting sideways again after its brief rebound on Monday. Major coins are down slightly today, as investors digest mixed signals from Washington and Beijing.
Bitcoin trades at $113K, down 2% on the day, while Ethereum is holding just above $4,100 after a 2.5% drop. BNB slid over 4%, though it remains above $1,200. Solana climbed back over $200, but most top tokens are still well below last week’s highs.
The broader market is showing hesitation. The global crypto market cap declined to $3.86 trillion after recovering slightly, and the Fear and Greed Index is holding at 38, deep in the “Fear” zone. For now, traders appear to be waiting for confirmation that the worst is behind them – and they haven’t gotten it yet.
Fed’s Cautious Tone
In a closely watched speech today, Fed Chair Jerome Powell struck a balanced tone. He acknowledged rising downside risks to employment and hinted that rate cuts remain possible. While he didn’t commit to any policy changes, Powell said the Fed may slow its balance sheet runoff in the coming months – a move that could ease liquidity pressure on markets.
This gave crypto a temporary boost, but it wasn’t enough to sustain bullish momentum. The lack of key macroeconomic data due to the ongoing U.S. government shutdown is leaving the Fed and investors flying blind. Powell’s “meeting-by-meeting” stance doesn’t provide much clarity in a market looking for direction.
Read also: Crypto Markets Rise Despite U.S. Government Shutdown
Geopolitics and Liquidations Keep Pressure On
US-China tensions also continue to weigh heavily. While Trump tried to ease concerns with a friendly post about President Xi, the situation hasn’t de-escalated much.
On Tuesday, China imposed sanctions on U.S.-linked firms and introduced retaliatory port fees. The tit-for-tat measures leave open the possibility of a broader trade war.
Liquidation risks are another source of market stress. Friday’s record-breaking wave of forced selling has left scars, and Binance’s $300 million compensation program has yet to calm all nerves. Confidence in centralized platforms remains shaky, especially as volatility exposes their limits under pressure.
Read also: Stablecoins Wobble During Flash Crash – But Most Pass the Test
Outlook: Calm, but Far from Confident
For now, crypto is in a wait-and-see phase. Powell’s speech helped prevent another wave of panic, but it didn’t give investors a reason to re-enter aggressively. Markets need new data – especially the next U.S. inflation report – before sentiment can truly turn.
Until then, price action will likely remain choppy, with traders watching every macro headline. The recovery from last week’s crash was a relief, but not a resolution. Volatility may be subdued for now, but the uncertainty is far from over.
