Crypto Slumps as Fed Ends QT Amid US-China Trade Thaw
Crypto market prices tumbled after a 25-basis-point Fed rate cut failed to reassure investors on liquidity. Treasury Secretary Scott Bessent’s deal to pause US tech export limits in exchange for China lifting rare-earth controls eased US-China trade tensions, typically bolstering the crypto market.
Instead, mixed messages from the FOMC and Chair Jerome Powell—ending quantitative tightening without a clear quantitative easing timeline—triggered profit-taking. Bitcoin slid below $107,000, breaking its 200-day EMA, and over $1.1 billion in crypto derivatives liquidations occurred within 24 hours. Traders fear a repeat of the 35% post-QT Bitcoin collapse in 2019 and are awaiting clearer Fed guidance before reentering long positions.
Bearish
The crypto market remains bearish as the Fed’s decision to end quantitative tightening without a clear QE timeline has created a liquidity gap. Mixed Fed signals and profit-taking led Bitcoin to breach its 200-day EMA and triggered over $1.1 billion in derivatives liquidations. Historical precedent from the 2019 post-QT 35% Bitcoin drop intensifies trader caution. Short-term pressure should persist until the Fed provides clearer guidance and liquidity returns.