Bitcoin dropped nearly 2% to around $79,800 during Asian trading on Monday as traders cut their exposure to risk assets ahead of the Federal Reserve’s upcoming policy meeting. Continued weakness in Asian technology stocks, fueled by renewed concerns about AI investments, dragged down major cryptocurrencies, with Ether and XRP recording notable declines.

The downturn affected most leading digital assets. Ether fell almost 3% to slightly above $2,300, while XRP lost around 3% to $1.28. Solana declined 2%, hovering just above $100. DOGE, ZEC, HYPE and BNB each shed between 1% and 2%. TRX was the only major token to post a gain, rising less than 1%, according to CoinDesk data.

Jeff Mei, chief operating officer of crypto exchange BTSE, said investors were becoming increasingly cautious after Bitcoin slipped below the $80,000 mark.

Mei told CoinDesk that the market’s attention was firmly on the Fed meeting, particularly any comments from Chair Kevin Warsh that could indicate a rate increase in December. Although policymakers are widely expected to leave interest rates unchanged this week, their guidance on future decisions could have a greater influence on crypto prices.

He added that elevated crude oil prices, escalating tensions between the United States and Iran, and persistent inflation could encourage the Fed to take a tougher stance. Higher interest rates and tighter liquidity would likely create additional pressure on cryptocurrencies and equities.

Traders Await Signals From the Federal Reserve

The Federal Reserve will announce its latest interest-rate decision on Wednesday. Investors will closely monitor Warsh’s press conference for clues about the central bank’s next move, particularly whether another rate hike could be considered in December.

Higher rates make borrowing more expensive and can reduce demand for speculative investments. A more restrictive monetary policy could therefore limit capital flowing into cryptocurrencies and other risk-sensitive assets.

AI-Related Selling Continues Across Asia

Technology shares across Asian markets extended their declines as investors reassessed the outlook for artificial intelligence spending.

South Korea’s Kospi fell 1% after Goldman Sachs strategists lowered their 12-month target for the index by 25%. The benchmark is closely watched as an indicator of AI sentiment because semiconductor manufacturers, including Samsung Electronics, account for a significant portion of its market value.

Japanese chipmakers were among the biggest losers on the Nikkei, while Chinese AI model developers also suffered declines. Nasdaq 100 futures slipped 0.1% as markets prepared for earnings reports from major US technology companies later this week.

The MSCI Asia Pacific Index edged down 0.1%, extending its struggle to recover from four consecutive weekly losses. This marks its longest losing streak since April.

Oil Pullback Offers Markets Some Relief

Brent crude fell 2% from a six-month high to approximately $114 per barrel after President Donald Trump indicated that a decision was approaching on whether to negotiate an agreement with Iran or resume military attacks. US Treasury prices rose during the session.

Bitcoin’s immediate technical challenge is to reclaim the $82,500 level, which it lost last Thursday. A recovery above that threshold could indicate that the recent decline is a temporary setback. Until then, traders may remain cautious as they await the Fed’s decision and upcoming earnings from major technology companies.