Here’s why the crypto market is falling today

The crypto market fell 2.6% to $2.60 trillion on Thursday as concerns over a prolonged blockade at the Strait of Hormuz and the Federal Reserve’s hawkish stance on rate cuts weighed on investor sentiment.

Bitcoin (BTC) price dropped 3.5% to an intraday low of $75,102 from its Wednesday high of $77,800 before trading sideways within the $75,000–$76,500 range and settling near $76,000 at press time. Ethereum (ETH) was down 3% to $2,250, while other top altcoins such as $XRP ($XRP), $BNB ($BNB), and Solana (SOL) declined by 1–2% each.

The broader crypto market weakened amid a confluence of geopolitical tensions and macroeconomic pressures that have continued to dampen risk appetite.

U.S. President Donald Trump has recently warned officials to prepare for an extended U.S. naval blockade of the Strait of Hormuz, which has now stretched into another week with no clear resolution. The standoff comes as Iran signals it may resume peace negotiations with the U.S. and consider reopening the strait only if Washington lifts restrictions on Iranian ports.

Iranian authorities have previously warned of retaliation against U.S. assets if the blockade persists, accusing Washington of attempting to force Tehran into concessions through economic pressure and internal destabilization.

Shortly following Trump’s remarks, WTI crude futures surged back above $110 per barrel, approaching their highest levels since 2022. Brent crude also climbed around 1% to trade near $111. Analysts have warned that a sustained spike in energy prices could raise inflation risks and push the global economy closer to a recession.

These fears have increasingly spilled over into crypto markets, where investors tend to reduce exposure to high-volatility assets during periods of macro uncertainty and rising geopolitical risk.

Fed’s hawkish stance adds to crypto market pressure

Beyond geopolitical tensions, crypto prices have also faced pressure from tightening monetary policy by the Federal Reserve, with expectations for rate cuts this year continuing to fade. In its policy decision released Wednesday, the central bank held interest rates steady at 3.5% to 3.75%, a move that was largely priced in by markets. However, its messaging reinforced that policymakers are in no hurry to begin easing.

Cryptocurrencies have historically performed better when the Fed signals a shift toward rate cuts, as lower interest rates tend to boost liquidity and investor appetite for risk assets. Conversely, a prolonged higher-for-longer stance often weighs on crypto and growth-oriented markets.

Commenting on the Fed’s decision, Diana Pires, Chief Business Officer at sFOX, said in a statement to crypto.news: “What stood out today is that nothing meaningfully disrupted that framework. Inflation isn’t convincingly back to target, and the Fed isn’t signaling a near-term shift.”

Pires added that “markets may want clarity on cuts, but the Fed isn’t giving it yet,” noting that until conditions change, capital will likely continue to favor safer assets. “For crypto, that means the macro backdrop remains a headwind, not a tailwind,” she said.

Meanwhile, Thomas Perfumo, Chief Economist at Kraken, pointed to emerging divisions within the central bank that could shape future policy direction.

“Today’s FOMC decision to hold rates flat was the least interesting aspect of the meeting,” Perfumo said, highlighting that the vote revealed “a loud crack in the Powell-era consensus,” with four dissents — the highest number since 1992.

He added that with markets now pricing a roughly 90% probability of rates remaining unchanged through year-end, investors may be factoring in continued policy uncertainty. This dynamic, he said, is “a net negative… for assets like crypto and growth equities.”