Bitcoin News Today: Bitcoin's Slide Highlights Dollar Dominance as Fed Caution Undercuts Trade Deal Optimism

Bitcoin fell below its critical 200-day moving average on October 30, signaling renewed bearish momentum as the U.S. dollar surged to a three-month high, driven by Federal Reserve caution and easing U.S.-China trade tensions. The dollar index (DXY00) climbed to 99.72, its highest since August 1, amid hawkish remarks from Fed Chair Jerome Powell, who downplayed expectations of a December rate cut, according to Coindesk. Meanwhile, Bitcoin (BTC) traded at $107,085.71, having broken below the $109,380 200-day SMA, a key technical level that often triggers further selling pressure, Coindesk reported.

The Fed's recent policy actions underscored its cautious stance. On October 29, the Federal Open Market Committee (FOMC) cut the federal funds rate by 25 basis points to 3.75%-4.00% and announced the end of quantitative tightening by December 1, according to Nasdaq. However, Powell emphasized that a December rate cut was "not a foregone conclusion," a statement interpreted as a hawkish signal that bolstered the dollar, Yahoo Finance reported. Markets now price in a 72% probability of a 25-basis-point cut at the December FOMC meeting, with expectations of a total 82-basis-point reduction by year-end, Nasdaq data showed.

U.S.-China trade developments added complexity to the market narrative. President Donald Trump and Chinese President Xi Jinping agreed to reduce U.S. tariffs on Chinese goods from 57% to 47% and pledged cooperation on fentanyl controls and rare earth mineral supplies, Coindesk reported. While this eased global trade tensions and supported risk assets, Bitcoin failed to capitalize on the optimism, declining 4% in the 24 hours following the deal, CoinGape reported. Analysts attributed the lackluster crypto response to lingering demand weakness and profit-taking in equities, which hit record highs amid the trade thaw, Nasdaq reported.

The dollar's strength also stemmed from divergent central bank policies. The European Central Bank (ECB) left rates unchanged at 2.00% despite stronger-than-expected Eurozone Q3 GDP growth of 0.2% quarterly and 1.3% annually, Nasdaq reported. Meanwhile, the Bank of Japan (BOJ) maintained its 0.50% policy rate, with Governor Kazuo Ueda noting the need for "more data on domestic wage-setting behaviors," Nasdaq noted. This contrast fueled the dollar's gains against the euro and yen, with EUR/USD falling to a two-week low and USD/JPY rising 0.94% to an 8.5-month high, Nasdaq reported.

Gold prices, typically a safe-haven asset, also faltered amid the dollar's rally and reduced geopolitical risk. Spot gold declined 2.85% to $2,654.69, pressured by ETF outflows and the U.S.-China trade deal, Yahoo Finance reported. However, underlying support remained from the ongoing U.S. government shutdown, which heightened expectations of future Fed rate cuts, Nasdaq observed.

The Fed's policy uncertainty and trade developments created a mixed environment for markets. While the S&P 500 and Nasdaq 100 hit record highs, cryptocurrencies faced headwinds from dollar strength and profit-taking in equities, Nasdaq reported. Analysts at BofA Securities noted that Powell's remarks "pushed back against market pricing of a December cut," reinforcing the dollar's near-term bullish bias, Investing.com reported.