POWELL’S PIVOT: Bitcoin Takes a Nosedive as Fed Chairman Puts the Brakes on the Bull Run

POWELL’S PIVOT: Bitcoin prices tumbled on Wednesday after U.S. Federal Reserve Chair Jerome Powell signaled that another interest rate reduction in December was “far from a foregone conclusion,” sparking volatility across global markets.

During his post-meeting press conference, Powell’s cautious remarks contrasted sharply with investor expectations for a continued easing cycle. The comments came shortly after the Federal Open Market Committee (FOMC) announced a quarter-point rate cut, bringing the target range down to 3.75%–4.00%.

Bitcoin immediately fell below $110,000, dropping as low as $109,000 within minutes of Powell’s remarks, before testing the critical $108,000–$100,000 support zone. The cryptocurrency later recovered some losses, rebounding to around $111,500 as traders reassessed the broader implications of the Fed’s stance.

Powell’s Caution Shakes Investor Confidence

Market participants had largely priced in both the quarter-point reduction and an expectation of another cut before year’s end. However, Powell’s language indicated that policymakers are not yet committed to a December move, citing ongoing uncertainty in the economic outlook.

“A further reduction in the policy rate at the December meeting is not a foregone conclusion—far from it,” Powell stated, underscoring the central bank’s data-dependent approach.

The statement was widely interpreted as a sign that the Fed is trying to balance slowing economic growth with lingering inflation concerns. Powell added that “the downside risks to employment appear to have risen in recent months,” suggesting that the labor market, while still resilient, may be showing early signs of strain.

The Fed’s latest report described economic activity as expanding at a “moderate pace” but noted that job growth has slowed and unemployment has edged slightly higher. Inflation, the statement said, “remains somewhat elevated.”

Divisions Within the Fed: Trump-Appointed Miran Pushes for Deeper Cuts

Adding to market uncertainty was news that Stephen Miran, a Fed Board member appointed by President Donald Trump, voted for a 50-basis-point cut instead of the smaller reduction ultimately approved by the committee.

According to Fed records, Miran is expected to push for additional cuts in the coming quarter, aligning with the White House’s position that lower borrowing costs are essential to counter economic headwinds and bolster the labor market.

Miran’s dissent highlights growing division within the central bank, as some officials argue for a faster pace of monetary easing to prevent a potential downturn, while others caution that too much stimulus could reignite inflationary pressures.

“The split vote reflects the difficult balance the Fed faces,” said Allison Grant, chief economist at Horizon Capital. “The central bank is caught between signs of economic softness and a political environment that’s pushing for looser policy ahead of the 2026 elections.”

Market Reaction: Crypto and Commodities Under Pressure

Bitcoin’s decline mirrored broader market unease. Spot gold also dipped briefly after the announcement, as investors weighed the likelihood of higher real yields if the Fed adopts a more patient approach. U.S. equities, meanwhile, ended mixed, with tech and financial sectors showing modest losses.

Traders noted that Bitcoin’s swift intraday drop reflected its heightened sensitivity to interest rate expectations, particularly as institutional investors continue to treat the cryptocurrency as a high-risk asset class that performs best in looser monetary conditions.

“The message from Powell was simply more cautious than markets wanted,” said Ravi Kapoor, a digital assets strategist at QuantAlpha. “Crypto thrives on liquidity. Any signal that the Fed might slow its easing path tends to spook investors, at least in the short term.”

Still, analysts emphasized that the long-term bullish structure of Bitcoin remains intact, as it continues to trade well above its 200-day moving average. “This looks like a short-term reaction to macro headlines rather than a fundamental shift,” Kapoor added.

Looking Ahead: December in Focus

Markets will now turn their attention to upcoming inflation and employment data, which will heavily influence the Fed’s December decision. A sustained slowdown in hiring or a drop in wage growth could revive expectations for another rate cut, potentially reigniting risk appetite across equities and digital assets.

However, if inflation proves sticky or the economy shows resilience, policymakers may opt to pause further easing, keeping borrowing costs steady into early 2026.

For Bitcoin, the next few weeks are likely to remain volatile. Analysts are watching the $108,000–$100,000 range as a key support zone. A decisive break below that level could trigger deeper technical selling, while a recovery above $115,000 would signal renewed momentum.

As Powell summed up, “We remain committed to our dual mandate — maximum employment and stable prices—and will act as appropriate based on the data.