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:
Ethereum (ETH) fell 1.93% to $3,899.87.
XRP dropped 2.74% to $2.53.
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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