The sell-off coincided with hawkish remarks from Federal Reserve Chair Jerome Powell, who, at a Dallas conference, emphasized a cautious approach to rate cuts: “The economy is not signaling urgency to lower rates,” he said, curbing hopes for rapid easing. This rhetoric spooked markets, dampening speculative fervor.
Source: BNC Bitcoin Liquid Index
FOMC December Rate Cut Odds Lower
As of Friday, traders are pricing in a 66% likelihood of a 25 basis point cut at the December FOMC meeting, a notable drop from the previous day’s 83%. Powell’s comments reflect the Fed’s confidence in the economy’s resilience, suggesting no immediate need for aggressive monetary easing. The Fed’s hawkish tone sent ripples beyond crypto. The CME FedWatch tool now places the odds of a December rate cut at 62%, down from 83% just a day prior.
XRP Surges on Legal Developments
In contrast to Bitcoin’s dip, XRP soared 17%, hitting $0.82 in early Asian trading. This rally marks a 50% gain over the past week, fueled by optimism around legal challenges to the SEC. A coalition of 18 U.S. states recently filed a lawsuit against the regulator, accusing it of unconstitutional overreach. Traders are speculating that a potential Trump re-election could usher in a more crypto-friendly regulatory environment, benefiting tokens like XRP and Uniswap (UNI).
Ripple CEO Brad Garlinghouse was on stage at the Cantor Crypto Conference. He tweeted, “Safe to say that the US is ready to be the crypto capital of the world with the next Trump Administration. Also, an apt shirt to wear on perhaps what are Gary Gensler’s last days in office?!”
Source: X
Volatility Amid Geopolitical Tensions
Bitcoin’s slip also comes amid ongoing Middle East tensions, which have historically created mixed market signals for risk assets like crypto. Meanwhile, gold continues its upward trajectory, signaling a flight to safety. The market’s gyrations underscore the dual influence of macroeconomic policy and regulatory shifts, setting the stage for a volatile end to the year.
