Bitcoin Plunges as Powell’s Hawkish Remarks Shake Markets

A solid down day in the crypto market turned into a steep plunge after Federal Reserve Chairman Jerome Powell delivered unexpectedly hawkish comments during his post-policy meeting press conference. Powell stated, “A rate cut in December is far from a foregone conclusion,” stunning traders who had priced in a 90% chance of another rate cut at the Fed’s final meeting of the year.

Bitcoin (BTC) reacted instantly, dropping nearly $2,000 to around $109,600, erasing most of its earlier weekly gains. The world’s largest cryptocurrency is now down roughly 5% in the past 24 hours. The broader market followed suit—U.S. stocks shifted from modest gains to losses, the 10-year Treasury yield jumped eight basis points to 4.06%, and the U.S. dollar surged. According to CME’s FedWatch tool, the probability of a December rate cut fell sharply to 69% from 90%.

Earlier, the Fed had cut its benchmark federal funds rate by 25 basis points to 3.75%-4.0%, a move analysts dubbed a “hawkish cut.” Notably, Kansas City Fed President Jeffrey Schmid dissented, favoring no change.

Adding to the uncertainty, the ongoing government shutdown has caused a data blackout, leaving policymakers cautious about signaling future cuts. “The shutdown’s data blackout means subsequent Fed moves are now unpredictable,” said Marcin Kazmierczak, co-founder of RedStone, in an emailed note. “This uncertainty likely means bitcoin and broader crypto volatility through year-end.”

Meanwhile, Paul Howard, director at Wincent, noted that BTC is trying to stabilize within the $110,000–$120,000range. He added that the pullback could present a “short-term accumulation opportunity,” expecting macroeconomic improvements heading into November before potential year-end consolidation.