Global crypto markets continued to struggle on Thursday, even as the U.S. and China made progress toward easing trade tensions and the Federal Reserve delivered an expected interest rate cut.
U.S. Treasury Secretary Scott Bessent announced that Washington would temporarily lift certain technology export restrictions on Chinese firms. In exchange, Beijing agreed to pause its export limits on rare earth minerals — critical materials for electronics and defense production, according to a Reuters report.
The agreement marks another step in thawing relations between the two largest economies, a development that would typically lift market sentiment. Yet, despite the seemingly positive geopolitical backdrop, cryptocurrencies failed to respond positively following the latest Federal Open Market Committee (FOMC) meeting.
Fed Chair Jerome Powell’s remarks sparked caution across risk assets, as he confirmed that policymakers held “strongly differing views” on whether another rate cut would be justified in December.
Although the Fed confirmed the official end of quantitative tightening (QT) — a process that drains liquidity from markets — investors were reminded that there’s often a delay before quantitative easing (QE) begins. This transition period, historically, can weigh on crypto prices as liquidity remains tight.
Massive Liquidations Hit Crypto After FOMC
Following Powell’s press conference, more than $1.1 billion in leveraged crypto positions were liquidated within 24 hours, according to Nansen data.
Bitcoin (BTC) slid below $107,000, breaching its 200-day exponential moving average (EMA) — a key technical support level closely watched by traders.
Analysts warned that a similar pattern occurred in 2019, when Bitcoin dropped 35% after the Fed ended its previous QT cycle, underscoring how liquidity gaps can trigger panic selling.
Powell reiterated that while inflation has cooled substantially since mid-2022, it remains above the Fed’s 2% target, and the path ahead is uncertain.
“There were strongly differing views about how to proceed in December,” Powell noted. “A further reduction in the policy rate is not guaranteed — policy is not on a preset course.”
With rate cuts failing to ignite a crypto rally and uncertainty still clouding the macroeconomic outlook, traders appear to be bracing for a volatile few weeks ahead — until liquidity starts flowing again.
