Crypto Market Tumbles: What’s Driving the Dip and When Will the Rally Return?

Crypto's bleeding—but this isn't your average panic sell. Here's why markets are down and how the rebound could surprise even the skeptics.

Macro tremors shake digital assets

Bitcoin's flirting with $50K again as Fed whispers about rate hikes send shockwaves through risk assets. Traders are dumping alts like last year's NFTs—because nothing says 'safe haven' like over-leveraged meme coins.

Institutional whales circling

BlackRock's BTC ETF outflows hit $1.2B this week, but on-chain data shows accumulation wallets gobbling up the dip. Someone's playing the long game while retail cries over margin calls.

The comeback playbook

History says crypto winters thaw faster than Wall Street's enthusiasm for mediocre SPACs. With Ethereum's ETF launch weeks away and Bitcoin halving narratives brewing, the smart money's already positioning.

So is this the bottom? Nobody rings a bell—but the last time BTC dominance hit 55%, altseason followed hard. Just don't tell your financial advisor.

Crypto market is down ahead of FOMC decision

The cryptocurrency market pulled back after the U.S. released strong economic data, raising concerns about the Federal Reserve’s tone when it delivers its interest rate decision later.

A report by ADP showed that the economy added 104,000 jobs in July after shedding 23,000 in the previous month. The job addition was much higher than the expected 75,000.

Another report showed that the economy staged a strong comeback in Q2, rising by 3%. This marked a significant improvement following the economy’s 0.5% contraction in Q1. 

Therefore, these numbers mean that the Federal Reserve may deliver a hawkish tone when it completes its two-day meeting later. In this scenario, the bank will leave rates unchanged and hint that it will not be in a hurry to cut rates as U.S. President Donald TRUMP has pushed.

Crypto crash accelerated amid trade jitters

The crypto market also crashed amid the rising trade jitters as the August 1 deadline nears. In a statement, Trump said that the U.S. will impose a 25% tariff and other penalties on goods shipped from India on August 1.

This is a major escalation as the two countries do trade worth billions a year. The U.S. exported goods worth over $41.8 billion in 2024, while its imports were worth $87.4 billion.

Other countries risk more tariffs this week. For example, Brazil, a country where the U.S. has a large trade surplus, will be hit with a 50% tariff. Others that will be affected include South Korea and South Africa.

The cryptocurrency market often experiences a decline when major geopolitical issues arise. For example, most tokens plunged in April when Trump announced his retaliatory tariffs.

Will the crypto market rebound?

Fortunately, there are signs that the crypto market will rebound in the near term. For one, demand for most crypto ETFs continues to rise, with the cumulative Bitcoin and ethereum ETFs rising to $55 billion and $9.8 billion. 

Another reason the crypto market is expected to recover is that, as the chart above shows, Bitcoin (BTC) has formed a bullish pennant pattern, indicating an eventual comeback. Such a move will lead to more gains among altcoins.