Cryptocurrencies Decline Ahead of Fed Minutes as Risk Appetite Weakens

Cryptocurrency markets declined during Tuesday trading as geopolitical tensions between the United States and Iran heightened uncertainty, while investors awaited the release of minutes from the Federal Reserve’s January policy meeting. The minutes are expected to provide further guidance on the trajectory of US interest rates and broader monetary policy, both of which remain key drivers of risk-sensitive assets such as cryptocurrencies.

Investor sentiment deteriorated notably. The cryptocurrency Fear & Greed Index fell to around 13 points — firmly in the “extreme fear” zone — compared with an average near 50 over the past month. This shift reflects growing caution among investors amid macroeconomic uncertainty and elevated geopolitical risks.

Major Cryptocurrencies See Modest Declines

Bitcoin slipped 0.1% to $68,141.76, maintaining a market dominance of roughly 58.2% of total cryptocurrency market capitalisation. Ethereum declined 0.35% to $1,976.45, while XRP posted a steeper fall of 1.65% to $1.4665.

The broader pullback reflects a typical risk-off response as investors temporarily reduce exposure to volatile assets while awaiting clearer signals from monetary policymakers and global developments.

XRP Shows Relative Resilience Amid Broader Weakness

Despite the broader downturn in digital assets, XRP demonstrated some resilience, staging a modest rebound after recent losses. Standard Chartered recently cut its 2026 price forecast for XRP by 65% to $2.80 from $8, citing a “capitulation-prone” market environment and declining investor risk appetite.

At the time of writing, XRP was trading around $1.48, up approximately 1.5% over the past 24 hours after falling to a recent low of $1.16 during the sell-off. However, the token remains down roughly 30% over the past month and about 45% over the past year.

The bank cautioned that further short-term downside remains possible before any meaningful recovery emerges, although it maintained a longer-term price target of $28 by 2030.

Institutional Outflows and ETF Weakness Add Pressure

Analysts note continued institutional outflows from digital assets, with limited momentum in exchange-traded fund (ETF) allocations despite roughly $1.37 billion in inflows since late 2025. Elevated interest rates and persistent geopolitical uncertainty continue to dampen investor appetite for higher-risk assets.

Data from the SoSoValue platform indicates that assets in XRP-linked ETFs declined from approximately $1.6 billion in early January to around $1 billion by mid-February — a roughly 40% contraction. This suggests a significant withdrawal of institutional capital from the segment.