Fed hike bets drag BTC and ETH

TLDR

Rising Federal Reserve rate hike odds have put pressure on Bitcoin (BTC) and Ethereum (ETH), as traders rotate away from high risk assets ahead key inflation data.

1. Fed Governor Wallers hawkish comments and higher oil have pushed market pricing toward a possible summer rate hike, lifting short term yields and the dollar.
2. BTC and ETH sold off several percent on July 13 as part of a broader crypto slide tied to tighter policy fears, though both have since stabilized near 62,000 and 1,800.
3. The next CPI and PPI reports plus Fed Chair Warshs testimony will largely decide whether this move extends into a deeper risk off phase or reverses.

Confidence: high because multiple macro and crypto sources align on the driver.

Deep Dive

1. Fed Hike Odds

Recent remarks from Fed Governor Christopher Waller warned that another hot inflation print could be a signal to raise rates rather than noise, pushing September hike odds above 50 percent according to CME FedWatch, as summarized by crypto market coverage.

At the same time, escalating U.S.Iran tensions have driven Brent crude toward the mid 80 dollars area, reinforcing inflation worries and supporting the dollar and short term Treasury yields, as detailed in multiple macro updates.

Money markets now assign around a 50 percent chance of a July hike, up from near 10 percent days earlier, according to a CoinDesk analysis.

2. Crypto Price Reaction

In that backdrop, major cryptocurrencies dropped by roughly 2 to 3 percent over 24 hours, with Bitcoin falling to about 62,000 dollars and Ether near 1,770 dollars in Mondays session, as reported by Yahoo Finance and Crypto.news.

CoinsKid data now shows BTC around 62,773 dollars with a small 24 hour change of about minus 0.11 percent, and ETH near 1,796 dollars, up about 0.92 percent, suggesting a modest intraday rebound after the macro driven selloff.

The total crypto market cap sits near 2.16 trillion dollars with a slight 24 hour dip, while BTC dominance is around 58 percent and ETH near 10 percent, indicating the move was broad but still led by the largest assets.

3. Risks And Next Signals

The immediate catalysts are the June CPI print and subsequent PPI data, plus Fed Chair Kevin Warshs monetary policy testimony to Congress, which several outlets flag as a critical test for the rate path and crypto volatility (example).

If inflation comes in softer than expected and Warsh leans toward a policy hold, it could reduce hike bets and support a relief move in BTC and ETH. Conversely, a hotter print combined with continued geopolitical stress would reinforce higher for longer and keep pressure on high beta names.

For now, ETF flows into BTC and ETH have turned positive again, which partly cushions the macro shock but does not remove the sensitivity to upcoming data.

Conclusion

Fed hike bets are currently a primary driver of BTC and ETH swings, with oil and Middle East tensions amplifying inflation concerns. The next inflation reports and Fed communication will determine whether this latest drag turns into a renewed downtrend or a brief macro scare before liquidity returns to crypto.