Bitcoin Drops Amid Geopolitical Tensions and Fed Policy Uncertainty

Bitcoin (BTC) fell over 2.5% in the past 24 hours to around $105,900, while altcoins experienced sharper losses. Ethereum (ETH) dropped to $2,655, Solana (SOL) to $153.59, XRP to $2.21, and Dogecoin (DOGE) to $0.1826, with many seeing 5%-7% declines. The pullback in digital assets came as broader risk markets faced fresh macro and geopolitical headwinds.

Investor sentiment weakened after U.S. President Donald Trump warned of possible new tariffs and growing tensions with Iran. Trump suggested that a military conflict with Iran was not imminent but “could very well happen,” prompting warnings for Americans in the region. He also said he advised Israel against striking Iranian nuclear facilities while diplomatic talks are ongoing.

Despite these headlines, U.S. equities managed to close with modest gains. Crypto markets, however, remained under pressure, reversing recent momentum fueled by bullish sentiment and speculation around interest rate cuts.

Adding to the uncertainty, May’s U.S. Producer Price Index (PPI) came in softer than expected, while jobless claims remained elevated at 248,000, matching last week’s multi-month high. Continuing claims climbed to 1.956 million, the highest since November 2021, raising concerns about weakening labor market conditions.

Trump again targeted Federal Reserve Chair Jerome Powell, calling him a “numbskull” for maintaining a tight monetary stance and hinted at taking action to influence Fed policy. While Powell’s term runs until 2026, Trump’s remarks fueled speculation over potential political pressure on the central bank.

Crypto traders are now watching closely for further signs of economic softness that could force the Fed to pivot, while geopolitical risks continue to drive short-term volatility across risk assets, especially in crypto markets.