Tomorrow, the Fed President will address US monetary policy, causing ripples in the crypto markets. Traders are on edge as they await crucial words that could sway Bitcoin prices. Futures contracts predict rate cuts, but Powell's speech could alter the course.
Jerome Powell will speak this Tuesday at the annual meeting of the National Association for Business Economics (NABE) in Philadelphia. His speech titled “Economic Outlook and Monetary Policy” comes amid significant market volatility, amplified by US-China trade tensions and sharp corrections in the crypto market.
Futures markets currently show a 97% probability for a 25 basis point cut in October, followed by an 89% probability for December. These expectations reflect anticipation of monetary easing in response to economic slowdown. However, if Powell adopts a hawkish tone and suggests rates will remain elevated longer than expected, the crypto market could experience another wave of massive sell-offs.
Last week, Donald Trump’s announcement of 100% tariffs on Chinese products triggered a drop of more than $125 billion in the total crypto market capitalization within hours. Bitcoin, which had touched $122,000, plunged below $102,000 on Saturday. This correlation between trade policy and crypto prices demonstrates the sector’s increased sensitivity to macroeconomic factors.
Professional traders are now monitoring three key variables: the rate cut timeline, the Fed’s position on inflation, and the impact of tariffs on the US economy. Every signal from Powell will be scrutinized to anticipate risk-on or risk-off direction in the weeks ahead.
Bitcoin fell 3% today to reach $111,459, while Ethereum dropped 6.7% to $3,950. This technical decline follows profit-taking after the bounce initiated by reassuring statements from Trump and JD Vance on Sunday, suggesting openness to negotiations with Beijing. Trump posted on Truth Social: “No worries regarding China, everything will be fine,” describing Xi Jinping as “highly respected.”
This recovery remains fragile and could quickly reverse if Powell disappoints market expectations for accommodation. The psychological support levels at $108-110,000 for Bitcoin and $3,700 for Ethereum will be crucial in the next 48 hours. A break below these zones could trigger cascade liquidations on leveraged positions, amplifying volatility.
Crypto traders should focus on several key points during the Fed Chairman’s speech. First, his assessment of inflation: if Powell believes inflationary pressures persist, he might delay monetary easing. Additionally, his analysis of tariff impacts on US growth will provide insights into economic resilience.
Crypto markets now react synchronously with stocks and traditional indices, strengthening their correlation with overall risk sentiment. A dovish speech favoring closely spaced rate cuts would likely propel Bitcoin to new highs. Conversely, a restrictive message could reactivate downward pressure and push prices back toward support zones tested late last week.
Altcoins typically follow BTC and ETH movements with a multiplier effect. Increased volatility in major cryptocurrencies will therefore mechanically impact the entire crypto market in the hours following the speech.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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