(Oct 30): Bitcoin continued to lose ground, after hawkish remarks from US Federal Reserve chair Jerome Powell dampened expectations for another interest-rate cut this year.
The largest cryptocurrency fell as much as 3.1% to below US$108,000 (RM453,527) before trimming losses on Thursday. The retreat followed the Fed’s widely expected decision to lower its benchmark rate by a quarter percentage point to 3.75%-4% on Wednesday — its second straight reduction — while Powell cautioned investors against assuming further cuts would follow.
The decline picked up pace after US President Donald Trump’s meeting with Chinese President Xi Jinping, but the selling quickly slowed. Trump said the pair had an “amazing meeting” resulting in a trade deal that would see the US halve fentanyl-related tariffs on Chinese goods effective immediately.
Powell’s comments “created a bit of risk-off sentiment,” said Charlie Sherry, head of finance at BTC Markets. “Add in the Trump-Xi meeting stirring markets today, and, unsurprisingly, you get some volatility. Some technology stocks are rallying, but crypto hasn’t followed, which shows some relative weakness and hesitation in digital assets right now.”
Treasury yields and the dollar climbed after Powell’s remarks on Wednesday, while US equity futures turned lower. Interest-rate swaps now imply about a 60% probability of another quarter-point cut in December, down from almost fully priced in before the decision.
See also: JPMorgan to allow bitcoin and ether as collateral in crypto push — Bloomberg
Powell “indicated that there are ‘strongly differing views’ among the committee,” said Augustine Fan, partner at crypto trading platform SignalPlus. “The situation is made even more difficult with the government shutdown and data blackout, with the chairman suggesting they could be cautious by waiting out the December meeting.”
Nick Ruck, director at LVRG Research, said Powell’s tone “caught traders off-guard and erased recent gains.” Bitcoin traders should look for support at US$107,000 and US$100,000 as key downside levels, he added.
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