Investing.com– Bitcoin fell on Thursday, extending a recent downtrend and failing to gain much support from Wall Street gainers after the Federal Reserve signaled it could cut interest rates in September.

Sentiment towards cryptocurrency markets has been largely capped by fears of a massive sell-off by the U.S. government, which released about $2 billion worth of bitcoin earlier this week.

Support from crypto-positive pledges for Republican presidential candidate Donald Trump also largely dried up after a Bloomberg poll showed Democratic frontrunner Kamala Harris eroding Trump’s lead in seven key battleground states.

It fell 2.9% over the past 24 hours to $64,256.2 as of 2:01 a.m. ET, and was down as much as $63,599.5 earlier in the day.

Fed Talks Interest Rate Cuts, But Bitcoin Price Doesn’t Move Much

The Federal Reserve is expected to make a decision on Wednesday, as widely expected, with Chairman Jerome Powell signaling further progress on lowering inflation and a weaker labor market.

Powell explicitly raised the possibility of a rate cut in September, especially if the data were more favorable. His comments sent Wall Street into a tailspin.

Optimism about the US Federal Reserve, coupled with positive results from the technology sector, kept investors largely bullish on stocks, even as the prospect of lower US interest rates created a positive outlook for cryptocurrencies.

Cryptocurrency markets thrive in low interest rate environments as greater liquidity favors their speculative nature.

But outside of U.S. markets, risk appetite elsewhere was less enthusiastic. Japanese markets fell after the Bank of Japan and signaled more upside potential as the Japanese economy grew more resilient. They surged after the BOJ’s move, which hit a near three-week low against the currency.

Rising geopolitical tensions in the Middle East following the killing of the Hamas leader in Iran have also contributed to a weakening appetite for risk.

Cryptocurrency price today: XRP growth halts, altcoins fall

Broader crypto markets tracked Bitcoin’s decline, falling 5.7% as it reversed its recent rally. The token surged following unsubstantiated rumors that the company issuing XRP was close to reaching a settlement with the Securities and Exchange Commission over a long-running lawsuit.

The world’s second-largest token fell 3.7% to $3,179.26 an ounce, while the price of 1,000 tokens fell 6.9% and 5.1%, respectively.

Among meme tokens, the decline was 3.9%.