Bitcoin Drops Below Support as Dollar Gains Before Powell Speech
Bitcoin (BTC) dropped below a key support level, impacting the broader crypto market as the US dollar strengthened ahead of Federal Reserve Chair Jerome Powell’s speech.
- Bitcoin fell over 1% to $121,500, moving below the 200-hour simple moving average.
- Other major tokens like BNB and ETH decreased by more than 3%.
- The CoinDesk 20 Index declined by 1% to 4,155 points.
This drop followed strong inflows into U.S.-listed spot ETFs, which gained $426 million on Wednesday, continuing a trend of robust inflows over the past week.
- The dollar index rose to 99.10, its highest since August 1, reducing the appeal of dollar-denominated assets like bitcoin and gold.
- Gold briefly fell to $4,000 per ounce before rising above $4,030 per ounce.
Fed Chair Powell is set to speak at the Community Bank Conference in Washington, with traders seeking insights on monetary policy amid a U.S. government shutdown that has halted economic data releases such as inflation and jobs figures.
Minutes from the Federal Reserve September meeting highlighted concerns over the shutdown:
- If the shutdown continues until the FOMC’s October 28-29 meeting, policymakers will lack key economic metrics.
Minutes Showed Caution Over Inflation
- While there was consensus on rate cuts, there was disagreement on their pace due to inflation concerns.
- Most participants believed further policy easing would be appropriate this year.
- A majority emphasized the upside risks to inflation outlooks.
- Participants voted 11-1 to reduce the federal funds rate by 25 basis points, targeting around 4%.
- Most expected at least two more rate cuts this year, with seven officials seeing no further reductions.
Discussions covered a weakening labor market and potential reacceleration of inflation. However, the committee agreed that trade tariffs were not a lasting source of inflation.