The United States Treasury announced on Thursday that it would suspend restrictions designed to limit Chinese firms’ access to sensitive American technology.
According to Treasury Secretary Scott Bessent, the decision was made in exchange for Beijing agreeing to pause its export controls on rare earth minerals—critical resources for both electronics and military defense applications.
This development comes after weeks of improving trade relations between Washington and Beijing, signaling a thaw that analysts typically see as bullish for risk assets such as cryptocurrencies.
However, broader market sentiment turned cautious following comments from Federal Reserve Chair Jerome Powell after the recent Federal Open Market Committee (FOMC) meeting.
Powell revealed that FOMC members hold “strongly differing views” on whether to pursue an interest rate cut in December, which sparked a downturn across major asset classes.
Federal Reserve Ends Quantitative Tightening
In addition to policy uncertainty, the Fed confirmed the end of quantitative tightening (QT)—a measure that had restricted liquidity in financial markets.
Analysts often view increased liquidity as a positive factor for crypto prices, as it signals more capital flow into riskier assets.
Despite that, there is typically a lag between the end of QT and the beginning of quantitative easing (QE), when the central bank actively injects liquidity into the financial system.
This interim period can lead to price declines as investors wait for more stimulus-driven inflows.
Bitcoin Market Faces Over $1 Billion in Liquidations
Shortly after the Fed’s announcement, more than $1.1 billion in leveraged crypto positions were liquidated within 24 hours, according to CoinGlass.
This wave of liquidations pushed Bitcoin below $107,000, breaching its 200-day exponential moving average (EMA)—a key technical support level monitored by traders.
Powell reiterated during his press conference that inflation “has eased significantly from its highs in mid-2022, but remains somewhat elevated relative to our 2% target goal.”
He added that the central bank continues to face challenges balancing its dual mandate of promoting maximum employment and maintaining price stability.
“There were strongly differing views about how to proceed in December,” Powell said. “A further reduction in the policy rate at the December meeting is not a foregone conclusion — far from it. Policy is not on a preset course.”
Historical Parallels Stir Investor Anxiety
Investors are also drawing comparisons to 2019, when Bitcoin fell by 35% after the Fed ended QT during that market cycle.
That memory has led some traders to worry about similar volatility as the central bank once again winds down its balance sheet reduction efforts.
With policy uncertainty, limited liquidity, and fading optimism around U.S.–China trade easing, the crypto market remained mostly in the red Thursday, with traders closely watching for signs of stabilization ahead of December’s key Fed decision.