Bitcoin News Update: Bitcoin Decline Underscores Dollar Strength While Fed's Warnings Dampen Hopes for Trade Agreement

On October 30, Bitcoin slipped beneath its crucial 200-day moving average, indicating a resurgence of bearish sentiment as the U.S. dollar soared to its highest level in three months. This dollar rally was fueled by the Federal Reserve's cautious approach and a softening in U.S.-China trade frictions. The dollar index (DXY00) reached 99.72, the strongest since August 1, after Fed Chair Jerome Powell made hawkish comments that tempered hopes for a rate cut in December, according to

. At the same time, (BTC) was trading at $107,085.71, having fallen below the $109,380 200-day SMA—a significant technical threshold that often leads to additional selling, as reported by Coindesk.

The Federal Reserve's latest moves highlighted its prudent outlook. On October 29, the Federal Open Market Committee (FOMC) lowered the federal funds rate by 25 basis points to a range of 3.75%-4.00% and revealed plans to end quantitative tightening by December 1, according to

. Nonetheless, Powell stated that a December rate cut was "not a foregone conclusion," a message widely seen as hawkish and supportive of the dollar, reported. Current market pricing suggests a 72% chance of a 25-basis-point cut at the December FOMC meeting, with expectations for a total reduction of 82 basis points by the end of the year, indicated.

Developments in U.S.-China trade relations further complicated the market landscape. President Donald Trump and Chinese President Xi Jinping agreed to lower U.S. tariffs on Chinese imports from 57% to 47% and committed to working together on fentanyl regulation and rare earth mineral supply, Coindesk reported. Although this alleviated global trade tensions and benefited risk assets, Bitcoin was unable to benefit from the positive sentiment, dropping 4% in the 24 hours after the agreement,

reported. Analysts attributed the muted crypto reaction to persistent weak demand and profit-taking in stocks, which reached new highs amid the easing trade situation, according to Nasdaq.

The dollar's rally was also supported by differences in central bank policies. The European Central Bank (ECB) kept its rate steady at 2.00% despite stronger-than-expected Eurozone GDP growth of 0.2% for the quarter and 1.3% year-over-year, Nasdaq reported. Meanwhile, the Bank of Japan (BOJ) maintained its 0.50% policy rate, with Governor Kazuo Ueda stating that more information was needed on domestic wage trends, according to Nasdaq. These policy divergences boosted the dollar against both the euro and yen, with EUR/USD dropping to a two-week low and USD/JPY climbing 0.94% to its highest in eight and a half months, Nasdaq reported.

Gold, typically seen as a safe haven, also lost ground as the dollar strengthened and geopolitical risks eased. Spot gold fell 2.85% to $2,654.69, pressured by outflows from ETFs and the U.S.-China trade agreement,

reported. However, continued support came from the ongoing U.S. government shutdown, which increased expectations for future Fed rate cuts, Nasdaq noted.

Uncertainty around Fed policy and trade developments created a mixed backdrop for financial markets. While the S&P 500 and Nasdaq 100 reached new record highs, cryptocurrencies struggled due to the strong dollar and profit-taking in equities, Nasdaq reported. Analysts at BofA Securities observed that Powell's comments "challenged market expectations for a December rate cut," reinforcing the dollar's short-term strength,

reported.