Why is Crypto Market Going Down Today?

**Cryptocurrency Market Plunges 2% as Federal Reserve Decision Looms** The cryptocurrency market is experiencing significant downward pressure today, with total market capitalization dropping over 2% to approximately $3.81 trillion ahead of the Federal Reserve's highly anticipated policy announcement. Bitcoin and major altcoins are trading in the red as investor sentiment deteriorates, reflected by the Crypto Fear and Greed Index falling to 39, indicating widespread market anxiety. This crypto market selloff highlights the continued correlation between traditional financial markets and digital assets, as traders position themselves defensively before potential Federal Reserve rate changes. The declining market cap signals that institutional and retail investors are reducing their cryptocurrency exposure amid monetary policy uncertainty. Market analysts suggest this bearish trend could persist until Fed Chairman Jerome Powell provides clarity on interest rate directions, which historically impact risk assets like Bitcoin, Ethereum, and other blockchain-based tokens. DeFi protocols and cryptocurrency exchanges are also seeing reduced trading volumes as market participants adopt a wait-and-see approach. The current market downturn underscores the volatile nature of digital assets and their sensitivity to macroeconomic factors affecting global financial markets.