In a notable decline, the major cryptocurrencies experienced significant drops on Monday, as investors opted to take profits ahead of the anticipated Federal Open Market Committee (FOMC) meeting. This decision came amidst unsettling news involving an attempted assassination of Republican presidential candidate Donald Trump, stirring worries in various markets.
Bitcoin (BTC), one of the largest cryptocurrencies by market cap, decreased by more than 2.4% over the past 24 hours, prompting trades at around $58,659. Similarly, Ethereum (ETH) faced a drop exceeding 4%, trading at $2,307. The overall global crypto market capitalization fell by 2.5%, resting at approximately $2.04 trillion.
Additionally, the CoinDesk Market Index noted a decline of over 2.6% in the same timeframe. Commenting on the situation, Min Jung, an analyst with Presto Research, stated, "Although linking the crypto price drop to the Trump assassination attempt is uncertain, the timing aligns with a sharper market downturn.
We attribute this to crypto shedding Friday's gains, coupled with a broader risk-averse sentiment as investors brace for uncertainty ahead of the FOMC meeting." The tense political atmosphere was exacerbated when authorities in Florida arrested a suspect following a shootout involving U.S. Secret Service officers near Trump's golf course.
The incident was underscored by the FBI's characterization of the altercation as an attempted assassination. Interestingly, Trump has recently shifted his stance on cryptocurrency, becoming a proponent of the industry during his recent political maneuvers, despite having opposed it during his presidency, as reported by the Associated Press. Moreover, there was noteworthy activity in the exchange-traded fund (ETF) space related to cryptocurrencies.
Bitcoin ETF spot prices recorded total net inflows amounting to $263.2 million just last Friday, according to data provided by Farside Investors. On the other hand, Ethereum ETFs saw a more modest increase, accumulating combined net inflows of $1.5 million. Looking ahead, this week's economic focus will center on the FOMC meeting scheduled for Tuesday and Wednesday.
Analysts are consistently predicting that this could herald the first rate cut since the current target range was established at 5.25% to 5.5% in July of the previous year. However, there remains uncertainty regarding the magnitude of this potential cut, as forecasts suggest it could range from 25 to 50 basis points. In addition to the FOMC discussions, other critical economic data points this week include the retail sales figures and the National Association of Home Builders (NAHB) housing market index, both set for release on Tuesday.
Wednesday will bring insights into housing starts and building permits, while Thursday is expected to unveil the existing home sales data for August, further illuminating the state of the economic landscape..