Cryptocurrency markets faced significant declines as new U.S. tariff policies and persistent inflation data diminished hopes for Federal Reserve interest rate cuts. Bitcoin fell below $115,000 while altcoins led the downturn, with Dogecoin and Ripple experiencing some of the steepest losses.
The U.S. government imposed fresh tariffs ranging from 10% to 40% on key global trading partners, adding pressure to risk-sensitive assets like cryptocurrencies. These trade barriers amplified existing market uncertainties and contributed to the widespread sell-off across digital asset markets.
Simultaneously, newly released data showed core PCE inflation rising to 2.8% year-over-year, exceeding the Federal Reserve’s 2% target. This persistent inflationary pressure has drastically reduced expectations for monetary policy easing, with markets now pricing in a 58% probability of the Fed maintaining current rates in September.
The bearish sentiment particularly impacted alternative cryptocurrencies, with Dogecoin dropping 8% and Ripple declining 6%. Bitcoin slid approximately 3% amid the broader retreat from risk assets. This downward movement reflects investor reactions to tightened monetary policy expectations compounded by geopolitical trade tensions.