Bitcoin Drops to 10-Day Low Below $63,500 Amid Tech Sell-Off and Fed Apprehension

Bitcoin fell more than 3% on Tuesday, reaching a 10-day low as its price slipped toward the $63,000 level. The decline in the digital asset market coincided with broader risk-off sentiment, driven by a sharp sell-off in technology shares and investor uncertainty ahead of a pivotal U.S. Federal Reserve meeting.

By 01:42 ET (05:42 GMT), Bitcoin was trading at approximately $63,494.8, a level not seen since July 17, according to market data.

Tech Rout and Fed Jitters Fuel Sell-Off

The downturn in cryptocurrencies mirrored a significant decline in Asian technology stocks, particularly AI-related chipmakers. South Korea's KOSPI index slumped as investors grew concerned about the sustainability of massive spending on AI infrastructure and increasing competition, leading to sharp drops in shares of companies like Samsung Electronics and SK Hynix. This negative sentiment appears to have spilled over into higher-risk asset classes, including digital currencies.

Adding to market headwinds is the upcoming conclusion of the Federal Reserve's two-day policy meeting on Wednesday. According to the CME FedWatch tool, traders are pricing in a roughly 38% chance of a surprise quarter-point rate hike this week, with expectations for an increase in September climbing above 80%. Higher interest rates typically diminish the appeal of non-yielding assets such as Bitcoin.

Broader Market Weakness

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The pressure on Bitcoin has been compounded by persistent outflows from U.S.-listed spot Bitcoin exchange-traded funds (ETFs), which have undermined recent recovery attempts. Investor focus is also turning to a heavy week of earnings reports from major technology companies, which are expected to provide further insight into the health of the AI sector and broader risk appetite.

Most alternative cryptocurrencies, or altcoins, also declined amid the cautious mood. However, Ether, the second-largest cryptocurrency, bucked the trend with a notable gain.

• XRP fell 4.6% to $1.0593.
• Solana eased by 4.2%.
• Cardano declined by 6%.
• Dogecoin slipped 4%.

Regulatory Update

In Washington, progress on cryptocurrency regulation has slowed. The U.S. Senate has reportedly placed the Digital Asset Market Clarity Act on hold as lawmakers prioritize a Russia sanctions package and federal nominations. This delay pushes back the timeline for establishing a clearer regulatory framework for digital assets in the United States, a key piece of legislation for the industry.