Macro Uncertainty and Expectations for Fed Actions Trigger Steep Decline in Crypto Markets

Bitcoin,

, and all experienced sharp losses on Monday as a significant correction struck the cryptocurrency sector, with more than $1.7 billion in positions liquidated within the previous 24 hours. Data from Coinglass shows that 406,492 traders saw their positions closed, with long trades making up $1.61 billion of the liquidations. Major tokens dropped steeply: fell to $112,586.72, Ethereum reached $4,154.46, XRP hit $2.83, and Dogecoin traded at $0.2378, making this one of the most turbulent weekly starts in recent memory. Experts point to a blend of macroeconomic jitters ahead of the Federal Reserve’s widely expected rate cut and changing investor sentiment as key drivers of the selloff.

This reversal comes after a spell of market optimism, with spot Bitcoin ETFs recording $222.6 million in net inflows last Friday and Ethereum ETFs bringing in $47.8 million. Nonetheless, the recent downturn has largely erased these gains. Prominent analyst Michael van de Poppe expects Bitcoin to find a short-term bottom soon, likely entering a one to two week consolidation before regaining upward momentum. Ted Pillows also remarked that the market remains highly reactive to weakness in equities, which could extend the correction.

Alternative coins, especially XRP,

(SOL), and Dogecoin are forecasted to undergo even steeper declines. Analysts are anticipating a 15–20% retracement for these assets as the market prepares for the Fed’s upcoming decision and the September triple witching, a historically volatile event. The Altcoin Season Index, which peaked at 84 earlier in the year, has now retreated, indicating diminished momentum for smaller tokens. Market observers caution that Bitcoin's market share could rise to 60% as altcoins lag behind.

Traders are paying close attention to the interaction between broader economic trends and crypto-specific developments. The expected Fed rate cut has triggered a “sell-the-news” reaction as investors secure profits before possible policy changes. Furthermore, the triple witching of derivatives contracts on September 17 is likely to intensify near-term market swings. Pillows suggested Bitcoin may dip another 5–8%, while altcoins such as XRP and Dogecoin could see even bigger drops due to speculative selling and a shift toward safer assets.

While short-term volatility remains high, the long-term outlook is more positive. Goldman Sachs projects three more Fed rate reductions by the end of the year, potentially restoring risk appetite and lending support to crypto markets. Even so, analysts believe that a significant altcoin rally probably won’t occur until late 2025 or early 2026, once macroeconomic conditions become more favorable. For now, the market is working through a correction, with Bitcoin holding above $112,000—suggesting it may outperform alternative cryptocurrencies in the months ahead.