- Bitcoin fell below $111,000 after Fed Chair Powell’s hawkish comments.
- Powell said a December interest rate cut is “not a foregone conclusion.”
- Major cryptocurrencies like Ethereum, XRP, and Solana also posted losses.
Bitcoin and the wider cryptocurrency market took a sharp downturn after US Federal Reserve Chair Jerome Powell signaled that a highly anticipated December interest rate cut was not guaranteed, reversing market sentiment that had priced in further easing.
The hawkish remarks immediately spooked investors, sending Bitcoin below a key support level and triggering a broad sell-off across digital assets.
While the Fed did deliver an expected quarter-point rate cut, Powell’s commentary on the future path of monetary policy became the dominant driver of the market’s negative reaction.
Powell pours cold water on December rate cut hopes
At the conclusion of the Federal Open Market Committee (FOMC) meeting, Powell announced a 0.25% point reduction in the policy rate to a range of 3.75-4.00%.
However, he quickly tempered market optimism by adopting a cautious stance on future moves, stating a December cut “is not a foregone conclusion.”
Powell explained that the central bank needs more economic data, particularly after the recent government shutdown obscured key indicators.
“We may need to slow the pace of policy (rate) adjustments. I hope to obtain more data by December,” he said at the press conference.
He also revealed a growing divide within the committee.
“More and more Fed members want to delay rate cuts,” Powell continued, adding, “After two consecutive rate cuts, some members are taking a wait-and-see stance.
The view that we should wait at least one cycle is spreading.”
Bitcoin leads broad market plunge
The market’s reaction to Powell’s unexpected caution was swift and decisive.
Bitcoin, which had been trading steadily around the $113,000 level before the press conference, broke below its $110,000 support moments after his remarks, hitting an intraday low in the $109,000 range.
As of Thursday, the token was still struggling around $110,000, down roughly 2% from the previous day.
The weakness was felt across the entire crypto ecosystem.
According to CoinMarketCap, other major cryptocurrencies also posted significant losses:
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Ethereum (ETH) fell 1.93% to $3,899.87.
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XRP dropped 2.74% to $2.53.
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Solana (SOL) declined 1.04% to $192.37.
A silver lining? Fed to end quantitative tightening
However, Powell’s press conference was not entirely hawkish. He also formally announced the end of the Fed’s asset reduction program, known as Quantitative Tightening (QT), which could increase liquidity in the financial system.
“We have decided to end QT as of December 1,” Powell stated. He explained that the Fed’s balance sheet had shrunk by $2.2 trillion over three and a half years.
“We now believe we are close to sufficient reserves,” he said, signaling a shift toward balance sheet normalization.
With Fed in rearview, all eyes turn to US-China summit
With the Fed’s immediate policy path now clarified, investors are pivoting their attention to the next major potential catalyst: the US-China summit.
Following the crypto market plunge, traders are looking to the meeting between US President Donald Trump and Chinese President Xi Jinping as a possible source of positive news that could trigger a rebound.
The high-stakes meeting is scheduled for Thursday morning at the ‘Naraemaru’ facility at Gimhae Airport Air Force base.
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Crypto analyst Daan Crypto has provided an analysis of the rising Bitcoin dominance, explaining why this will likely continue to surge. Based on his analysis, the altcoin season is unlikely to come anytime soon, with many alts suffering significant selling pressure while BTC accumulation increases.
Bitcoin Dominance Surge Dashes Hopes Of Altcoin Season
In an X post, Daan Crypto stated that the Bitcoin Dominance shows no signs of stopping following the latest surge above 64%. He indicated that the dominance will only continue to rise as more treasury companies try to accumulate Bitcoin. Meanwhile, on the other hand, hopes of an altcoin season fade away as many altcoins are plagued with big unlocks and downtrending momentum.
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Daan Crypto also alluded to how there was a short squeeze last month on Ethereum, which took a lot of coins with it. However, this momentum quickly faded afterwards, again dashing hopes of an altcoin season. The analyst explained that there wasn’t sufficient spot bid to bid most of these coins up further.
Meanwhile, he cautioned market participants to pick their altcoin investments wisely. Daan Crypto remarked that most of them will underperform BTC over a larger timeframe. His warning suggests that the Bitcoin dominance will continue to trend upwards while an altcoin season may not happen anytime soon.
Basically, there is a lack of interest and capital in these altcoins to spark an altcoin season, which could see them outperform BTC. Meanwhile, the Bitcoin dominance is surging thanks to massive adoption from institutional investors. These companies are looking to adopt Strategy’s playbook or gain exposure through the Bitcoin ETFs.
BlockchainCenter data shows that it is still Bitcoin season and nowhere near altcoin season. For it to be altcoin season, 75% of the top 50 coins need to have outperformed BTC over the last 90 days. Only ten altcoins have outperformed the flagship crypto during this period.
Altseason Is Still Coming, But Slowly
In an X post, crypto analyst Astronomer assured that the altcoin season is still coming, although it could take a while. He noted that the price remains the same for these altcoins, but declared that nothing has changed. The analyst remarked that this lines up with the overall plan of the Bitcoin price ranging till the end of June and altcoins remaining in their local ranges.
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Astronomer also indicated that BTC needs to break out while the Bitcoin dominance remains below 65% for all parts of the plan for an altcoin season to be completed. The analyst urged market participants to be patient, expressing his confidence that an altcoin season would still occur.
At the time of writing, the Bitcoin price is trading at around $107,300, up in the last 24 hours, according to data from CoinMarketCap.
Featured image from Pixabay, chart from Tradingview.com
The trade war between the US and China continues to remain in the spotlight, with President Donald Trump’s mixed signals on tariff negotiations adding to global uncertainty.
Despite some signs suggesting that China is easing tariffs on certain U.S. goods, Donald Trump has yet to offer clear indications of a breakthrough. This ongoing uncertainty has left investors questioning whether a major shift in US-China trade relations is on the horizon.
Donald Trump Brushes Off China Tariff Pause Intentions
Over the past week, reports have emerged that China is quietly rolling back tariffs on select US products, including semiconductors and pharmaceuticals. This move has been seen as an effort to reduce pressure on China’s tech sector.
China is also considering relief on medical gear and chemicals. However, this softer approach has been countered by President Donald Trump’s recent statements. He claimed that the US is in ongoing talks with China, even stating that Chinese President Xi Jinping called him directly. These assertions were quickly denied by Beijing.
A Chinese foreign ministry spokesperson firmly stated, “China and the US are NOT having any consultation or negotiation on #tariffs.” The spokesperson went on to urge the US to stop “creating confusion.” Despite this, Donald Trump later mentioned he would consider removing tariffs on China, but only if Beijing offers something substantial in return. This back-and-forth leaves many wondering about the true state of negotiations and the broader consequences for global trade.
Effect of Tariff News on Crypto Market
The mixed signals from both sides are adding to the ongoing instability in the global economy. Tariffs have already significantly affected trade between the US and China, with the US imposing a 145% tariff on Chinese goods and China retaliating with a 125% tariff on U.S. imports. These actions have escalated the trade conflict, causing uncertainty for businesses and consumers alike.
Meanwhile, the crypto market has seen a significant rally despite the ongoing tariff tensions leading to speculations the bullish momentum maybe a fake rally leading up to a crypto crash. Cryptocurrencies, such as Bitcoin, have gained substantial value amid concerns about global trade disruptions.
Bitcoin price reached $95,000 on Friday, its highest level in 60 days. The crypto market’s surge has been linked to investors turning to digital assets as a safe haven, similar to how gold is traditionally viewed during times of economic uncertainty. However, with the BTC price recently hitting $95,300, crypto analysts Data Dash has highlighted that a potential correction to $60K.
Some predict that if Bitcoin breaks through this resistance, it could target new highs, possibly even reaching the $126,000 range. However, there are signs of bearish divergence, with the yearly open proving tough to breach leading to a potential price pullback according to crypto analyst Ali Charts.
Will Ethereum Price Breach $2K Resistance?
Ethereum is also following a similar path according to crypto analysts CrediBULL Crypto. Currently, the price of ETH is facing resistance around the $1,800 mark. If it can break through this level, it may see a rally toward the $2,000 range in the near term. On the other hand, if the price fails to hold above the $1,800 level, ETH could face a decline, potentially dropping to the $1,500 support levels.
Concurrently, other top altcoins have been performing well too with the XRP, Cardano (ADA), Solana (SOL), Dogecoin (DOGE) and Sui (SUI) soaring over 6%, 14%, 13%, 15% and 66% in the last week respectively. Moreover, according to analysts Michael van de Poppe the altcoins are just starting to rally with a pattern showing a big reversal looming which may set these cryptos up for a bullish rally.
The post Donald Trump Dashes Hopes of China Tariff Pause; Is a Crypto Crash Ahead? appeared first on CoinGape.
]]>In a recent development, the US Securities and Exchange Commission (SEC) has further dampened the mood in the crypto community following its decision to postpone two Spot Ethereum ETF applications.
The SEC’s Announcement
In two separate releases, the Commission announced that it was delaying its decision on the proposed rule change by the Cboe BZX Exchange to list and trade the shares of the VanEck Ethereum ETF and ARK 21Shares Ethereum ETF.
This decision comes just a day after the Commission announced extending the deadline to decide on ARK Invest’s Spot Bitcoin ETF application to January 10, 2024. A decision on ARK 21Shares Bitcoin ETF wasn’t due until November 11.
Similarly, the SEC delayed these pending ETH ETF applications weeks before the November 10 and 11 deadline for the VanEck Ethereum ETF and ARK 21Shares Ethereum ETF applications, respectively.
The SEC will now have an additional 45 days (which begins running from November 10 and 11) to decide on these applications, with the second deadline coming in December. According to the SEC’s releases, a decision on the VanEck Ethereum ETF is set for December 25, while a decision on the ARK 21Shares Ethereum ETF will come on December 26.
ETH price remains strong above $1,600 | Source: ETHUSD on Tradingview.com
How This Could Play Out
Contrary to earlier reports, asset manager VanEck had filed for the first Spot ETH ETF, not ARK Invest. The former had filed its application as far back as May 7, 2021. Meanwhile, the Ark 21Shares Ethereum ETF was filed on September 6 this year.
Going by this and the SEC’s announcement, the asset manager could have a first-mover advantage over others if the applications were to be approved based on filing dates.
However, it remains to be seen if the SEC will approve any of these applications in the first place, as there is the likelihood that these applications could face the same treatment that the Commission has meted out to the pending Spot Bitcoin ETF applications.
Whatever happens, the court’s ruling in Grayscale’s case against the SEC would undoubtedly influence the Commission’s decision on these Spot ETH ETFs, especially if the pending Ethereum futures ETF were to launch as planned in October.
If those ETFs were to launch, VanEck and ARK Invest can also argue that their Spot Ethereum ETFs should be approved on the grounds that the court has ruled that the futures and spot market are correlated.
Meanwhile, if the SEC chooses to play this out till the end, the earliest a final decision on these pending Spot Ethereum ETF applications could be made is around May 23, 2024, according to Bloomberg analyst James Seyffart.
Featured image from Analytics Insight, chart from Tradingview.com
Data from coinmarketcap.com showed crypto market capital shed another $30 billion from the start of the day and was at about $1.7 trillion. The day’s losses mark a 41% tumble in market capital from record highs hit last year.
No Plans for U.S.- Russia Summit
A Kremlin spokesman told reporters that there were no concrete plans to organize any summit with Washington, contrasting earlier reports from the French Presidency that both heads of state had agreed to a summit in principle. Concerns over Russia and Ukraine had knocked nearly $200 billion off crypto market capitalization last week.
While crypto markets had recovered slightly in early trade on Monday, news that a summit was unlikely saw a return to losses. Bitcoin was down 2.4% at around $37,700.
Ethereum dropped more than 1% to a three-week low of $2,621.32. Solana, which had raced past its peers earlier in the day, also fell 1.2%. Radix and NEO were among the worst performing tokens in the past 24 hours down around 7% each, while stablecoin Tether saw the highest volumes among its peers at $36 billion- more than twice as that of Bitcoin.
Tether has dominated market volumes in recent weeks, thanks to increased demand for less volatile, safe-haven assets.
Adding to pressure on cryptocurrencies and broader markets, Wall Street bank JPMorgan forecast nine straight rate increases by the Federal Reserve, until March 2023. Interest rate hikes will see a rapid end to the rampant liquidity that had fueled risk-driven assets over the past two years.
A phishing attack that stole “millions” from NFT marketplace OpenSea also appeared to have rattled sentiment towards digital assets.