The Fed is the real crypto story, Bitcoin and Ethereum are just following

The Federal Reserve's forthcoming interest rate decision is the primary driver behind the recent cryptocurrency market decline, rather than Bitcoin and Ethereum's intrinsic value or adoption trends. Bitcoin has fallen 0.72 percent to $76,697.14, while Ethereum has dropped 1.95 percent to $2,474.93. This pullback is a result of a broader market decline of 0.99 percent, driven by macro uncertainty and traders' expectations of a rate hike from the Fed.

The total crypto market cap has also declined by 0.99 percent, with Bitcoin's 0.72 percent drop closely mirroring the overall market movement. The correlation between Bitcoin's decline and the broader market indicates that the cryptocurrency is following market beta rather than reacting to a coin-specific catalyst. The derivatives data reveals a significant spike in liquidations, up 1,331.93 percent in 24 hours, which is a symptom of the sell-off and leveraged long flush, not the primary cause of the decline.

Bitcoin's near-term path depends on the US$76,000 support zone. If it holds above this level, a rebound toward $78,500 is possible. A break below this support could lead to a drop to $74,000. Ethereum's decline to $2,474.93 is more challenging as it has underperformed Bitcoin and failed to break through the US$2,530 to $2,550 resistance zone.

This rejection occurred alongside rising Treasury yields and tightening macro expectations for a Fed rate hike. The technical rejection, combined with macro-driven caution, has led to forced selling, including over $8.9 million in ETH liquidations at the US$2,523 level, mainly from long positions. The critical event for both Bitcoin and Ethereum remains the Federal Open Market Committee meeting on September 16, as market-implied probability for a hike is high.

For Bitcoin, a hold above the US$76,000 support level is crucial for a potential rebound. For Ethereum, holding above the US$2,450 support is necessary for a regroup and another attempt at the US$2,550 resistance.