Powell's Rate Cut Comments Send Bitcoin Below $110,000

Federal Reserve's Surprising Stance Rattles Crypto Markets

Federal Reserve Chair Jerome Powell delivered a double blow to Bitcoin investors on October 29, 2025, as his cautious comments about future rate cuts sent the cryptocurrency tumbling below the critical $110,000 support level. Despite the Fed delivering an expected 25 basis point rate cut, lowering the benchmark fed funds rate to a range of 3.75%-4.0%, Powell's subsequent remarks during his press conference created significant market uncertainty.

Bitcoin's Sharp Decline

Bitcoin, which had been trading around $111,800 before the announcement, experienced immediate volatility following Powell's comments. The cryptocurrency plunged to $109,350 at its lowest point, marking the lowest price since the previous Thursday. 'A further reduction in the policy rate in December is by no means a foregone conclusion,' Powell stated during the 7:30 PM Dutch time press conference, sending shockwaves through cryptocurrency markets.

The immediate market reaction was dramatic. Bitcoin's price, which had briefly recovered to $111,800, fell sharply below the psychologically important $110,000 level within minutes. At the time of writing, Bitcoin was trading at $110,877, struggling to maintain its position above this crucial support level according to market data.

Fed Policy Divisions Emerge

The Federal Open Market Committee (FOMC) decision revealed significant divisions among policymakers. Ten of the twelve committee members voted for the 25 basis point cut, while Kansas City Fed President Jeffrey Schmid voted to maintain current rates, and Fed Governor Stephen Miran advocated for a more aggressive 50 basis point reduction.

Powell described the decision as 'a matter of risk management' and emphasized that 'what we do from here is a different story.' The Fed chair acknowledged 'strongly differing views' among committee members regarding future policy direction, creating uncertainty about the central bank's next moves.

Market Expectations Shift Dramatically

The impact on market expectations was immediate and substantial. Before Powell's comments, futures markets had priced in a 90% probability of another rate cut at the December meeting. Following his remarks, this probability dropped to just 71%, according to CME Group data.

The broader market reaction extended beyond cryptocurrencies. U.S. stock markets declined during Powell's remarks, while traditional safe-haven asset gold experienced a slight increase. Powell's warning about the potential threat of stagflation - slowing economic growth combined with rising prices - contributed to the risk-off sentiment across financial markets.

Quantitative Tightening Conclusion

In a potentially positive development for risk assets, Powell announced that the Fed will conclude its quantitative tightening (QT) program on December 1. The QT process, which involves reducing the Fed's balance sheet by selling assets, has been draining liquidity from financial markets since 2022.

Analysts have noted that ending QT could eventually support flows into risk assets like Bitcoin by stopping the drain on market liquidity. However, the immediate market focus remained on Powell's cautious stance regarding future rate cuts, which overshadowed the positive implications of the QT conclusion.

Historical Context and Market Implications

This marks the second consecutive rate cut by the Fed, following a similar 25 basis point reduction in September. The central bank's gradual shift toward monetary easing comes as inflation has cooled to 3.0% year-over-year, while recent labor market data has shown weakness with only 22,000 jobs added in August and unemployment rising to 4.3%.

Market participants will now closely monitor upcoming economic data and Fed communications for clues about the central bank's December decision. The uncertainty created by Powell's comments suggests continued volatility in cryptocurrency markets as investors reassess their expectations for monetary policy support.