XRP led gains among major cryptocurrencies on Monday, as global markets braced for this week’s US Federal Reserve meeting and the continued fallout from rising tensions between Israel and Iran. With no policy changes expected, investor focus remains on the tone of the Fed’s communication, while risk assets, including crypto, trade cautiously.

XRP Leads While Bitcoin Wavers

XRP emerged as the standout performer, rising to $2.22 and outpacing other major tokens. Bitcoin initially climbed above $108,000 in the early US trading session, only to retreat to $106,500 amid profit-taking. It later rebounded slightly to above $107,000 during Tuesday’s Asian trading hours.

Ether (ETH) also posted modest gains, up 1.5% over 24 hours to $2,609, though it continues to trail behind Bitcoin’s ETF-led momentum. Solana (SOL) and Tron (TRX) held firm, gaining 1.5% and 2.1% respectively, indicating some resilience across large-cap altcoins.

The market tone remains cautious after a sharp $1.2 billion crypto futures liquidation on Friday that led to a weekend downturn for many altcoins. Overleveraged positions were flushed out, contributing to a temporary loss of confidence among traders.

ETF Inflows Signal Underlying Strength

Despite short-term volatility, Bitcoin exchange-traded funds (ETFs) recorded net inflows of $1.4 billion over the past week. Analysts point to this as a sign that spot-based investment products continue to act as stabilising forces, even amid broader market pullbacks.

“Bitcoin ETFs have become important anchors for price during uncertain times,” said Eugene Cheung, Chief Commercial Officer at OSL. “The flows into these products are helping cushion the volatility, even when futures markets see aggressive liquidations.”

While the ETF data paints a positive picture for Bitcoin, its near-term price action has been comparatively subdued, especially when contrasted with gold and oil’s recent surges.

Safe-Haven Assets Rally After Trump’s Tehran Warning

Gold and oil, both considered traditional safe havens, surged early this week following an unexpected statement from US President Donald Trump during the G7 summit. The former president called for the evacuation of Tehran, triggering a mini-rush into defensive assets.

“Bitcoin often lags behind macroeconomic triggers like geopolitical crises,” said Cheung. “While gold and oil are quick to respond to such events, Bitcoin’s reaction tends to be delayed. However, if investor sentiment continues to shift towards alternative stores of value, BTC may experience a renewed rally in the coming weeks.”

This delayed response may be temporary, with some analysts suggesting Bitcoin could soon play catch-up if the Federal Reserve’s signals align with market expectations.

Fed in Focus: Dovish Hints Anticipated

Markets are largely anticipating the Federal Reserve to hold interest rates steady this week, with inflation easing and job data remaining strong. However, much depends on the language used by Fed Chair Jerome Powell, particularly concerning inflation risks and potential tariff impacts.

“We’re expecting the Fed to hold rates steady this week as they wait to see how tariffs will affect the economy,” said Jeff Mei, Chief Operating Officer at BTSE. “Inflation is easing and jobs are holding strong, so there’s no rush to cut or raise just yet. They’ll likely wait for more data before making any big moves later this year.”

Some strategists believe the groundwork for a more dovish stance could be subtly laid during the meeting.

“There’s room for a dovish tilt, even if it’s not announced directly,” said Augustine Fan, Head of Insights at SignalPlus. “With recent inflation readings missing to the downside and jobless claims softening, the Fed might begin hinting at a pivot. However, we’re not expecting a major change just yet. The geopolitical backdrop will likely remain the dominant concern in the near term.”

Outlook Remains Uncertain

While ETF inflows and select altcoin strength offer reasons for optimism, the broader market sentiment remains fragile. The looming threat of geopolitical escalation and the Fed’s tone this week will likely dictate the next move for crypto assets.

Until clearer signals emerge, traders are expected to remain defensive, positioning cautiously ahead of any major economic or political developments.