The US Federal Reserve cut interest rates by 0.25% to a range of 3.75%-4.0% on Wednesday, as expected. However, Chair Jerome Powell's hawkish comments during the press conference cast doubt on a further cut in December, triggering a selloff in crypto markets. Bitcoin fell below $110,000, while Chainlink experienced volatility before a partial rebound.
The Federal Open Market Committee (FOMC) meeting on October 29, 2025, resulted in a 25 basis point reduction in the federal funds rate, bringing it to 3.75%-4.0%. This move aligned with market expectations, as the CME FedWatch tool had indicated a near 100% probability of the cut. Prior to the announcement, analysts like James Butterfill of CoinShares anticipated additional easing, stating, “The case for an additional 75 basis points of rate cuts this year appears to be strengthening,” with 25 basis points in October and 50 in December.
Powell's post-meeting remarks shifted the tone. He acknowledged labor market weakness but emphasized that “a rate cut in December is far from a foregone conclusion,” surprising investors who had priced in a 90% chance of another cut. The CME FedWatch odds subsequently dropped to 69%. This hawkish stance, amid an ongoing government shutdown limiting economic data, fueled uncertainty. Marcin Kazmierczak of RedStone noted, “The shutdown’s data blackout means subsequent Fed moves are now unpredictable, and that’s what markets hate most,” predicting heightened crypto volatility through year-end.
Crypto markets reacted sharply. Bitcoin tumbled about $2,000 to around $109,600, down 5% over 24 hours and below $110,000, erasing earlier weekly gains. The total crypto market capitalization slipped over 2% to near $3.81 trillion, with the Crypto Fear and Greed Index falling to 39. Chainlink's LINK token dropped to $17.96 amid a 178% volume spike above the 24-hour average, confirming a breakdown below $18 support, before rebounding 4% to $18.40 as buying emerged. Technical indicators showed selling exhaustion near $17.60, with resistance at $18.50-$18.80. Broader context includes US-China trade tensions ahead of a Trump-Xi meeting, though analysts like Butterfill argued Bitcoin remains “relatively insulated” from tariff impacts compared to equities. Thomas Perfumo of Kraken described the macro environment as the “dominant driver of this crypto cycle,” with the outlook still broadly supportive despite volatility.