Bitcoin Plummets to Six-Month Low as Fed Rate Cut Uncertainty Grows

URGENT UPDATE: Bitcoin has plunged to a six-month low, trading at approximately $95,000 as of Monday morning, down from its peak of $126,251 on October 6. This dramatic decline of nearly 25% has been fueled by rising uncertainty surrounding the Federal Reserve’s potential interest rate cuts at its upcoming December meeting.

Traders are reacting swiftly to concerns that the Fed may not lower rates as previously anticipated. Jerome Powell, the Fed chair, emphasized after the last cut in October that “a further reduction in the policy rate at the December meeting is not a foregone conclusion — far from it.” This statement has left investors wary, especially after a 43-day government shutdown delayed key economic data releases.

The probability of a December rate cut now stands at 43%, according to the CME FedWatch tool, marking a decline of over 10% since last week. Susan Collins, president of the Boston Fed, recently indicated that maintaining current policy rates may be necessary to balance inflation and employment risks in this unpredictable environment.

Market analysts report a significant shift in sentiment among institutions, with approximately $1.8 billion withdrawn from Bitcoin and Ethereum exchange-traded funds (ETFs) last week. This included a staggering $870 million in Bitcoin-related outflows on Thursday alone. Rachael Lucas from BTC Markets noted this trend signals a “clear risk-off shift from big money.”

Adding to the turmoil, Donald Trump‘s recent threats of a 100% tariff on Chinese imports have shaken investor confidence, contributing to widespread liquidations across major cryptocurrencies. Stephen Innes of SPI Asset Management remarked, “a month after its euphoric highs, Bitcoin’s Trump-trade sugar rush faded,” suggesting the cryptocurrency now feels like a “passenger — not a driver” in the market.

As the situation develops, all eyes will be on forthcoming U.S. economic data releases that could sway the Fed’s decision regarding interest rates. The volatility in the cryptocurrency market reflects broader trends influenced by macroeconomic policy and investor sentiment, making this a critical juncture for Bitcoin and its future trajectory.

Stay informed for the latest updates as this story unfolds.