Bitcoin Price Plummets to $107K Amid Fed Caution and Trade Talks

Bitcoin Magazine

Bitcoin Price Plummets to $107K Amid Fed Caution and Trade Talks

On Thursday morning, Bitcoin's price took a significant nosedive, dropping into the low $107,000s as traders processed cautious statements from Federal Reserve Chair Jerome Powell, coupled with mixed signals stemming from the recent Trump–Xi summit.

This sharp decline reversed the gains Bitcoin had achieved last week and continued to highlight the cryptocurrency's struggles throughout October, impacted by macroeconomic pressures and the complexities of U.S.-China trade relations.

By early Thursday, the leading cryptocurrency's value had fallen to $107,472 according to data from Bitcoin Magazine Pro, after experiencing a brief dip to $107,925 during the night.

The decline in Bitcoin's price followed the Federal Reserve's recent decision to enact a 25-basis-point rate cut on Wednesday, marking its second such action of 2025. This adjustment brought the target range to 3.75%–4%. While the cut was largely expected, Powell's commentary made it clear that any further reductions this year are uncertain.

During a press conference following the Fed meeting, Powell noted, "There were strongly differing views among policymakers," and suggested the Fed might wait a full cycle before considering another rate adjustment.

These comments unsettled the markets, which had been anticipating a rate cut in December. Data from CME FedWatch revealed that the likelihood of another cut plummeted from 90% to a mere 71% following Powell's remarks.

Elon Musk's SpaceX Bitcoin Moves and Crypto Market Reactions As a result, risk assets experienced a broad decline. The S&P 500 ended the day unchanged, the Dow Jones Industrial Average dipped by 0.2%, and the Nasdaq Composite managed a modest increase of 0.6%. It appears that Thursday's market outlook is not promising either.

Earlier in the week, Bitcoin was trading close to $116,000 but fell sharply as Powell spoke, briefly dropping to around $109,000 in a sudden sell-off before stabilizing around the $111,000 mark overnight.

Powell's cautious tone overshadowed what initially seemed like a positive development from the Trump–Xi meeting. Following the summit, President Trump announced that China would "immediately resume soybean purchases" and that "all rare-earth issues have been resolved." However, traders remained skeptical, prioritizing the Fed's hawkish stance and the ongoing U.S. government shutdown, which has now extended into its fourth week.

Institutional interest in Bitcoin also showed signs of wavering. U.S.-listed spot Bitcoin ETFs reported outflows of $470.7 million on Wednesday, marking the largest daily outflow since October 16 and ending a four-day streak of inflows, according to Bitcoin Magazine Pro data.

In his remarks, Powell did confirm that the Fed is approaching the conclusion of its Quantitative Tightening (QT) initiative, a factor that could potentially favor Bitcoin and other risk assets in the long run. As the market digests these developments, traders will be closely monitoring both the economic landscape and geopolitical dynamics, especially considering the critical interplay between monetary policy and cryptocurrency values.