Crypto update: Bitcoin plummets below $111,000 as Powell crushes December rate cut hopes.

Bitcoin has dropped below $111,000 following hawkish comments from Federal Reserve Chairman Jerome Powell. With indications that a much-awaited interest rate cut in December is not guaranteed, major cryptocurrencies like Ethereum, XRP, and Solana have also suffered significant losses.

Fed Chair Powell Dashes December Rate Cut Hopes

After the recent Federal Open Market Committee (FOMC) meeting, Powell announced a 0.25% reduction in the federal funds rate, bringing it to a range of 3.75% to 4.00%. However, he tempered market optimism by emphasizing that a rate cut in December is “not a foregone conclusion.”

Powell noted that the central bank requires additional economic data, particularly in light of the recent government shutdown that obscured key indicators. “We may need to slow the pace of policy adjustments. I hope to have more data by December,” he stated during the press conference.

He also highlighted a growing division within the committee, revealing that “more members of the Fed want to delay rate cuts,” suggesting a cautious stance among some officials. “The idea that we should delay for at least one cycle is spreading,” Powell added.

Bitcoin Leads Broad Market Decline

The market’s reaction to Powell’s unexpected caution was swift and decisive. Bitcoin, which was regularly trading around the $113,000 level prior to the press conference, slipped below its support level of $110,000 shortly after his remarks, reaching an intraday low in the $109,000 range. As of Thursday, the token remained under pressure, trading around $110,000, down approximately 2% from the previous day.

The weakness was felt across the broader cryptocurrency ecosystem. According to CoinMarketCap, other major cryptocurrencies also registered significant losses:

• Ethereum (ETH) fell 1.93% to $3,899.87.
• XRP declined 2.74% to $2.53.
• Solana (SOL) dropped 1.04% to $192.37.

A Glimmer of Hope? Fed Ends Quantitative Tightening

Despite the overall bearish sentiment, Powell’s press conference wasn’t entirely pessimistic. He also announced the official end of the Fed’s asset reduction program, known as quantitative tightening (QT), which might enhance liquidity within the financial system. “We have decided to end QT starting December 1,” Powell remarked. He acknowledged that the Fed’s balance sheet had decreased by $2.2 trillion over the past three and a half years.

“We now believe we are close to sufficient reserves,” he said, signaling a shift towards normalizing the balance sheet.

Looking Ahead: U.S.-China Summit in Focus

With the immediate path of Fed policy clarified, investors are now turning their attention to the next potential catalyst: the upcoming summit between the United States and China. Following the downturn in the cryptocurrency market, traders are viewing the meeting between U.S. President Donald Trump and Chinese President Xi Jinping as a potential source of positive developments that could spur a rebound. This high-stakes meeting is scheduled for Thursday morning at the “Naraemaru” facilities at Gimhae Air Base.