Bitcoin Dips Below $62K as Tech Sell-off Coincides With Crypto Weakness Ahead of Fed Decision

Bitcoin briefly slipped below $62,000 on Tuesday before recovering to around $63,890, down 1.4% on the day, as weakness in AI-related technology stocks coincided with broader risk-off sentiment across cryptocurrency markets ahead of Wednesday's Federal Reserve policy decision.

Market drivers

1. South Korea's KOSPI fell more than 10% as AI-related semiconductor stocks weakened, with Samsung Electronics and SK Hynix declining amid concerns over AI infrastructure spending and competition in the memory-chip sector.
2. The Nasdaq Composite was the only major U.S. equity index to close lower on Tuesday.
3. CME FedWatch data indicated markets were pricing in roughly a 32% probability of a surprise rate hike this week, with expectations for September tightening also increasing. Higher interest-rate expectations are generally viewed as less supportive for non-yielding assets such as Bitcoin.
4. Continued outflows from U.S.-listed spot Bitcoin ETFs coincided with softer price momentum in recent trading sessions.

Regulatory developments

The U.S. Senate has postponed consideration of the CLARITY Act, prioritizing Russia-related sanctions legislation and nominations.

The delay leaves a shorter legislative window before the Senate's summer recess. If the bill is not considered before the recess, further legislative action could be delayed until a later session.

The legislation has already passed the House of Representatives (294–134) and the Senate Banking Committee (15–9), but has not yet received a full Senate floor vote.

Altcoins

Ethereum fell 1.1% to $1,920.11, XRP declined 2.0% to $1.065, Solana lost 1.9%, Dogecoin dropped 1.5%, while Cardano rose 0.9%.

For Southeast Asian market participants

Market participants will be watching both the Federal Reserve's policy decision and developments surrounding the CLARITY Act, as each could influence cryptocurrency market sentiment in the coming weeks.

Sources: Reuters, CME Group, CoinDesk.