XRP, Solana, and Dogecoin Prices Slump Ahead of Fed Decision

The price of XRP, Solana, and Dogecoin fell on Tuesday ahead of the Federal Reserve’s upcoming policy decision, which may influence interest rate expectations.

The Fed is expected to keep its benchmark rate unchanged, but investors are keen on remarks from Fed Chair Jerome Powell and the Summary of Economic Projections (SEP) set to be released.

Bitwise Senior Investment Strategist Juan Leon told Decrypt, “Altcoin season may be dictated by Powell this year. If officials add more cuts to the ‘dot plot,’ that would likely boost crypto, given expectations of lower rates and higher implied support from the Fed to the economy.”

The SEP will contain projections for the unemployment rate and economic growth. Of particular interest to risk assets is the outlook on interest rates. The previous series of Fed rate cuts saw the crypto market surge.

However, the crypto market has lost $1 trillion in value since the Fed’s December meeting, as policymakers indicated fewer rate cuts than investors anticipated—projecting two quarter-percentage-point cuts instead of four.

On Tuesday, the prices for XRP, Solana, and Dogecoin each dropped over 4%, settling at $2.26, $124, and $0.16, respectively. Bitcoin declined by 2.4% to $82,000, and Ethereum fell 1.7% to $1,900.

Leon predicts Powell will maintain a “cautiously optimistic tone” and keep the dot plot unchanged. The Fed appears to be in a “wait-and-see mode” regarding tariffs and inflation, with Powell likely addressing a vague economic outlook.

President Trump’s inconsistent tariff policies have affected crypto prices since his inauguration. While these tariffs raise inflation concerns, there are worries about their impact on economic growth due to increased costs for consumers and businesses.

Elon Musk’s Department of Government Efficiency (DOGE) has compounded growth concerns, as market participants consider how potential federal spending cuts might affect employment and economic growth.

Leon noted that altcoins like XRP, Solana, and Dogecoin have become particularly sensitive to rate cut expectations, with a shift towards a more crypto-friendly attitude from the SEC.

“They will now be more at the whims of macro factors rather than specific regulatory actions,” he said.

Edited by Andrew Hayward