Bitcoin declined 1.72% over the past week despite the US–China tariff resolution, signaling weakened bullish momentum across the broader crypto market. While the trade truce initially supported risk assets, its impact quickly faded as uncertainty surrounding a potential December rate cut by Federal Reserve Chair Jerome Powell weighed heavily on investor sentiment. This cautious outlook led to increased Bitcoin price volatility, limiting any meaningful upside.
- Geopolitical Gains Fail to Boost Bitcoin
- Powell’s Warning Dampens Crypto Optimism
- Fed Officials Support Powell Amid Renewed Uncertainty
- The Week Ahead: Key Macro Data in Focus
- Frequently Asked Questions
- Why did Bitcoin fall despite the US-China trade truce?
- How did the US-China summit impact financial markets?
- What role does the Federal Reserve play in Bitcoin’s price movements?
- Why is the Altcoin Season Index important?
- Which upcoming US economic data will affect Bitcoin?
- How did leveraged positions impact Bitcoin after the October 10 crash?
- What should crypto investors watch this week?
- Conclusion
Market participants are now shifting focus to key US employment data scheduled throughout the week, which could play a decisive role in shaping the Federal Reserve’s interest rate strategy for December. Strong labor figures may reduce the likelihood of a rate cut, putting further pressure on Bitcoin, while weaker data could revive hopes for monetary easing and renewed price momentum.
Geopolitical Gains Fail to Boost Bitcoin
The critical period for crypto investors spanned October 29–30, coinciding with the Federal Reserve meeting and the high-stakes US–China summit. China agreed to key US demands, including a one-year delay in rare-earth export restrictions and the resumption of US soybean imports, while the US reduced overall tariffs on China from 57% to 47%. Leaders are also committed to reciprocal visits next year.
The resolution immediately influenced traditional safe-haven assets. Gold, which surged amid escalating tariffs, retreated to roughly $3,990 per ounce, while the Nasdaq 100 Index climbed about 2.7% from its October 10 low, supported by eased geopolitical risks and strong corporate earnings.
Bitcoin, however, lagged, trading near $110,000 by Sunday UTC—a 9.4% drop since October 10. Analysts link the slump to momentum loss after the October 10 crash, which liquidated $19 billion in leveraged positions and drained the rally’s primary fuel.
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Powell’s Warning Dampens Crypto Optimism
The Federal Reserve’s October 29 announcement marked a pivotal moment for markets. The FOMC cut the benchmark interest rate by 0.25 percentage points and confirmed the end of Quantitative Tightening (QT) starting December 1, a move typically positive for risk assets.
However, Fed Chair Jerome Powell added uncertainty by indicating that a December rate cut might not occur—the first time he offered such a clear view on the next meeting. Before the FOMC, the CME FedWatch tool projected a 91.5% probability of a December cut; Powell’s remarks pushed it down to 55%, immediately knocking Bitcoin’s price down 2%. While the likelihood has since recovered to 70.4% as of Sunday, the market outlook remains uncertain.
Fed Officials Support Powell Amid Renewed Uncertainty
Several Fed officials have publicly backed Powell’s cautious outlook. Atlanta Fed President Raphael Bostic noted that Powell’s comments reflected the Fed’s diverse perspectives and praised his willingness to signal a possible rate hold in December.
While the US–China summit eased Geopolitical tensions, in October, the Fed introduced fresh uncertainty about monetary policy. As a result, macroeconomic indicators like inflation and employment data will play a critical role in shaping market expectations this week. Crypto market uncertainty remains elevated, with the Altcoin Season Index dropping to 41 on Sunday—its lowest level since mid-August—highlighting lingering caution among investors.
The Week Ahead: Key Macro Data in Focus
This week’s market attention centers on a packed schedule of US employment data. Tuesday brings the JOLTs Job Openings and Labor Turnover Survey; Wednesday features ADP Nonfarm Employment; Thursday covers Unemployment Claims; and Friday concludes with the Michigan Inflation Expectations Index. Stronger-than-expected job figures could boost the likelihood of a December rate hold.
Investors will also watch public statements from Fed officials, including Governor Lisa D. Cook on Monday, Vice Chair Michelle W. Bowman on Tuesday, and Governors Michael S. Barr and Christopher J. Waller on Thursday, all of which could influence market sentiment and impact crypto and risk assets.
Frequently Asked Questions
Why did Bitcoin fall despite the US-China trade truce?
Bitcoin declined as Powell’s comments on a possible December rate hold overshadowed geopolitical gains, increasing market uncertainty.
How did the US-China summit impact financial markets?
The summit eased tensions, boosting the Nasdaq 100 and pushing gold lower, but Bitcoin showed limited gains.
What role does the Federal Reserve play in Bitcoin’s price movements?
Fed rate decisions and statements influence risk sentiment; rate cuts tend to support Bitcoin, while rate holds or hikes can pressure prices.
Why is the Altcoin Season Index important?
The index gauges crypto market momentum; a lower reading signals reduced investor confidence in altcoins relative to Bitcoin.
Which upcoming US economic data will affect Bitcoin?
Key reports include JOLTS Job Openings, ADP Nonfarm Employment Change, Unemployment Claims, and the Michigan Inflation Expectations Index.
How did leveraged positions impact Bitcoin after the October 10 crash?
About $19 billion in leveraged trades were liquidated, depleting buying momentum and weakening Bitcoin’s price recovery.
What should crypto investors watch this week?
Investors should monitor employment data, Fed officials’ comments, and broader market sentiment for potential volatility in Bitcoin and altcoins.
Conclusion
Despite the US–China trade truce easing geopolitical tensions, Bitcoin remains under pressure as Powell’s cautious stance and lingering uncertainty over December rate cuts dominate market sentiment. Investors are closely watching upcoming US employment data and Fed officials’ statements, which could trigger renewed volatility in crypto and risk assets.
