Bitcoin price dropped. Even though the Fed lowered interest rates and the US reached an agreement with China. Is this a bear market?
Good news hit BTC
U.S. Treasury Secretary Scott Bessent said on Thursday that the United States would suspend restrictions aimed at limiting Chinese companies’ access to technology that the U.S. government considers sensitive. In return, China is suspending export restrictions on rare earth minerals used in electronics and defense applications.
Bessent’s words came after several weeks of trade tensions.
As if that were not enough, the Federal Open Market Committee (FOMC) meeting decided to cut interest rates again. by 25 bp. Moreover, Federal Reserve Chairman Jerome Powell confirmed that as of December 1, the Fed will end quantitative tightening, which limits liquidity in the financial system. Higher liquidity means higher cryptocurrency valuations. At least on paper.
Bitcoin price is falling
The Bitcoin price dropped to $106,304 yesterday. Today, 1 BTC costs approximately USD 110,000. Except that’s still less than the cryptocurrency cost at the beginning of the month when it minted new ATH. And yet the conditions for growth are perfect!
However, a more detailed analysis of the past shows that bitcoin already reacted to the end of tightening… strangely. In 2019, the stock fell by 35% in response to a similar decision. It is possible that the market has “sold the news” now and the increases will come, but only after some time.
This was not helped by Jerome Powell, who said during a press conference that the December rate cut was not certain. The truth is that he could not have given a different answer, but, as you can see, the market decided to behave hysterically.
According to the Fed Watch Tool’s “valuation”, another cut is still the most realistic scenario.
In addition, at the end of the year, Donald Trump is expected to announce the name of Powell’s successor, whose term will end in May 2026. The new Fed president will certainly pursue the policy the White House wants – further reductions. This is more good news for bitcoin.
To sum up, the price of bitcoin fell amid good news, which suggests some manipulation, not a “right” decline.
