Crypto markets faced renewed selling pressure as Bitcoin dipped below $115,200 and Ethereum slid under $3,800, driven by fears over potential U.S. tariffs and diminished expectations for near-term Federal Reserve rate cuts.
According to a market update published on August 1, 2025, the decline highlights how macro uncertainty continues to influence crypto sentiment, despite recent momentum in altcoins like XRP.
Tariff Fears Trigger Risk-Off Mood
Markets were rattled by reports that the U.S. government is considering tariff adjustments on key imports. The uncertainty spilled into equities and commodities, prompting traders to reduce risk exposure in crypto.
“Bitcoin remains highly correlated with macro risk events,” said Marcus Liu, a senior analyst at MarketFlow. “The tariff chatter triggered a familiar risk-off response across digital assets.”
Ethereum Loses Momentum
Ethereum, which recently benefited from billions in ETF inflows and a surge in perpetual futures activity, was not immune to the broader sell-off. ETH fell to $3,780, though analysts say the correction may be temporary given strong institutional demand.
Despite the dip, Ethereum continues to dominate in stablecoin settlement and DeFi usage, reinforcing its position as the most versatile digital asset after Bitcoin.
Altcoins Under Pressure
Major altcoins also experienced losses:
Solana (SOL): down nearly 6%
Dogecoin (DOGE): dropped 5.7%
Avalanche (AVAX): down 4.2%
The declines suggest that traders moved capital to the sidelines rather than rotating into alternative tokens, reflecting a broader risk-averse environment.
XRP Stands Out
Interestingly, XRP continued to show resilience, buoyed by renewed retail demand on Coinbase. As reported earlier, XRP recently surpassed Ethereum in trading revenue on Coinbase, a development that underscores shifting short-term retail preferences.
This divergence highlights the importance of retail momentum during periods when macro conditions weigh heavily on institutional flows.
Fed Rate Cut Hopes Fade
Adding to the pressure, expectations for a near-term Fed rate cut diminished after inflation data showed a 2.6% annual increase, slightly above projections. This reinforced the Fed’s cautious stance, keeping investors on edge about liquidity conditions.
Outlook for Q3 2025
Analysts warn that volatility may persist through the quarter, especially if tariff disputes escalate. However, some remain optimistic about crypto’s resilience:
Bitcoin’s long-term support remains strong near $112,000.
Ethereum’s institutional demand could limit downside risk.
Altcoin innovation may spark renewed retail activity once macro fears ease.
For now, traders are watching both Washington’s tariff decisions and the Fed’s inflation outlook as key catalysts for the next move in crypto markets.
