How Did Powell's Statements Affect Bitcoin Prices?

Recently, the cryptocurrency market has experienced significant volatility due to the Federal Reserve's (Fed) interest rate policies. The price of Bitcoin fell sharply below the 110 thousand dollar mark, despite the anticipated interest rate cut by the Fed. This situation led to disappointment among investors.

Although the Fed took the expected step by lowering the interest rate by 0.25 points, Chairman Jerome Powell's statements after the meeting were not reassuring to investors. Powell emphasized that a new cut in December is not guaranteed, highlighting that inflation still remains at high levels and that a government shutdown complicates data readings. This cautious approach was perceived as “hawkish” by the markets, resulting in selling pressure in both equities and cryptocurrencies.

The Fed's previous interest rate decisions have generally been positively correlated with cryptocurrency markets. However, this time, Powell's cautious stance has reduced investors' appetite for risk, creating a negative atmosphere around Bitcoin and other cryptocurrency assets. After the interest rate decision, rising U.S. Treasury yields and the strengthening dollar continue to put additional pressure on cryptocurrencies and technology stocks.

Santiment analysts indicate that for Bitcoin to recover to the 115 thousand dollar level in the short term, the liquidation of increasing short positions in the futures markets is essential. Additionally, analysts stated that the inflation data and the state of the employment market are critical for the Fed's future actions. Powell’s statements clearly conveyed the message: “There is no automatic cut period.” This situation signals that both the cryptocurrency and stock markets are likely to remain volatile in the coming days.