Why Are Cryptos Falling Today? Fed Caution, Trump vs. Musk, and Market Jitters

🔹 Bitcoin briefly lost $2,000 before rebounding

🔹 The Fed cooled expectations for near-term rate cuts

🔹 Trump’s new OBBB bill sparks fresh tension with Elon Musk

BTC Trades Sideways – But Pressure Is Building

On July 1, the crypto market experienced a sharp pullback – Bitcoin [BTC] dropped from $107,000 to $105,000, before recovering on July 2 and climbing 1.23% back above $107,000.

This sudden dip triggered $252 million in liquidations across the market, with most assets turning red. Only a few, like Solana [SOL] and TRON [TRX], showed modest gains, while Ethereum [ETH] stayed in the red, trading below $2,500. Overall, it was a mixed day for crypto.

What Triggered the Drop? Fed’s Hawkish Message

The key driver behind the sell-off was Fed Chair Jerome Powell’s remarks at the European Central Bank (ECB) forum, where he confirmed that interest rate cuts are not imminent due to lingering inflation concerns.

“If not for the inflationary impact of recent tariffs, the Fed might have already started cutting rates,” Powell said.

He emphasized that the Fed would stick to a data-dependent approach, with no fixed timeline for easing policy. Still, markets are pricing in a potential rate cut in September, which could act as a key catalyst for risk assets in Q3.

Trump and Musk at Odds Again Over OBBB Bill

Adding to the market uncertainty was a political rift: Republicans passed the controversial One Big Beautiful Bill (OBBB), reportedly driving a wedge between Elon Musk and Donald Trump. Musk distanced himself from the bill, reigniting tensions between the two figures.

QCP Capital: Rangebound Market, Low Volatility

Crypto trading firm QCP Capital described the market as stuck in a short-term range, with BTC prices slightly rising but implied volatility near record lows.

“Risk reversals in BTC options are ticking up slightly, but the overall sentiment remains weak. Most traders are now favoring accumulation within a tight range,” QCP said.

Sector Breakdown: DeFi Lags, AI and Memecoins Bounce

Among market sectors, DeFi saw the largest losses, down an average of 4% – and was also the slowest to recover. In contrast, AI tokens, Layer 2s, and memecoins posted gains of 1–3% over 24 hours, according to Velo data.

Key BTC Levels to Watch

According to CoinGlass, these are the main liquidity zones:

🔹 $105,000 and $103,000 as support – where BTC could be drawn in case of further liquidation hunts

🔹 $108,000 and $109,000 as resistance – possible targets if bullish momentum returns

Summary: A Mixed Market Awaits a Clear Catalyst

Crypto markets remain uncertain, caught between political drama, Fed hesitation, and technical indecision. Volatility remains low, but conditions are ripe for sudden shifts – especially if macro or political developments escalate unexpectedly.

🔍 Question for readers:

Do you think the Fed will actually cut rates in September – or is the market just being hopeful?

#bitcoin , #CryptoMarket , #TRUMP , #ElonMusk , #JeromePowell

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,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“