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Bitcoin Updates Today: Bitcoin Shows Strength as Fed's Shift to Dovish Stance Eases Powell's Ambiguity

Bitcoin Updates Today: Bitcoin Shows Strength as Fed's Shift to Dovish Stance Eases Powell's Ambiguity

Bitget-RWA2025/10/29 19:28
By:Bitget-RWA

- Fed Chair Powell's speech triggered sharp Bitcoin swings, dropping 2% before rebounding amid mixed policy signals. - 3.75%-4.00% rate cut and QT pause injected liquidity, boosting crypto inflows as Bitcoin neared $113,000. - Political tensions and Trump's tariff rhetoric added volatility, though markets focused on Fed's dovish pivot. - 80% chance priced for December rate cut, with crypto markets embracing easing cycle despite Powell's uncertainty.

Bitcoin experienced significant volatility during Federal Reserve Chair Jerome Powell's latest

, dropping sharply before rebounding as traders reacted to conflicting signals about the central bank’s future policy direction. The crypto market underwent a swift and dramatic sell-off after Powell expressed uncertainty regarding upcoming rate reductions, but quickly recovered as investors adjusted their outlooks. This event highlighted how acutely digital assets respond to U.S. monetary policy changes, with trading close to $113,000 at the time of reporting.

Bitcoin Updates Today: Bitcoin Shows Strength as Fed's Shift to Dovish Stance Eases Powell's Ambiguity image 0

The market turbulence began after Powell spoke at a press conference following the Fed’s October 29 rate reduction. Although markets had anticipated a 25-basis-point cut—the first since 2023—Powell’s cautious approach regarding December’s decision triggered a rapid selloff. Bitcoin fell by nearly 2% immediately after his statements, resulting in $304 million in liquidations, based on data from crypto analytics firms. The losses were quickly reversed as traders interpreted Powell’s comments as an indication that more easing could be on the horizon, though not assured.

The Fed’s move to lower rates to a target range of 3.75%-4.00% was largely interpreted as a shift toward a more supportive policy stance, which has historically benefited risk assets such as Bitcoin,

. The central bank also announced it would conclude quantitative tightening (QT) by December 1, a move expected to boost market liquidity, . Still, Powell’s reluctance to promise further cuts in December, citing a lack of data due to the government shutdown, introduced more uncertainty. “We are not on a predetermined course,” he stressed, unsettling traders.

Bitcoin’s rebound reflected a broader wave of optimism about the Fed’s dovish turn. The cryptocurrency climbed above $110,500 after the announcement, with crypto investment funds

over the past week. Additionally, some investors committed $400 million to BTC as Trump met with China’s Xi, . At the same time, experienced outflows, while alternative coins like and attracted smaller but noteworthy investments. Analysts observed that lower interest rates and a weaker dollar tend to drive capital toward Bitcoin, reinforcing its reputation as “digital gold.”

The Fed’s rate reduction and the pause in QT are part of a broader easing trend that has already lifted crypto markets. Since September, Bitcoin has risen nearly 10%, regaining ground lost during October’s volatility caused by Trump’s tariff threats and the government shutdown. The current surge coincides with growing institutional interest, as spot Bitcoin ETFs have attracted $30.2 billion in inflows so far this year.

Powell’s comments also sparked political debate. President Trump

for what he called the Fed’s “slow” approach to rate cuts during a visit to South Korea, urging faster action to counteract the economic impact of his new tariffs. Such statements added to market uncertainty, though most experts believe that actual policy decisions, rather than political rhetoric, will determine Bitcoin’s direction.

Investors are now focused on the Fed’s December meeting, where another rate cut is widely expected. Markets currently estimate an 80% probability of a 25-basis-point reduction, with additional easing anticipated in 2026. For now, Bitcoin’s strength suggests that crypto markets are welcoming the Fed’s policy shift, even as they await

in November.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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