US Treasury Secretary Scott Bessent announced on Thursday the suspension of restrictions that limited access for Chinese companies to acquire technology deemed sensitive by the US government.
The lifted restrictions came after China agreed to suspend its export controls on rare earth minerals essential for electronics and military applications, as reported by Reuters.
Bessent’s statement follows a period of easing trade tensions between the two nations, often seen as a positive factor for cryptocurrency prices.
However, the recent Federal Open Market Committee (FOMC) meeting and comments from Federal Reserve Chair Jerome Powell, indicating that FOMC members hold “strongly differing views” regarding a potential interest rate cut in December, led to a market decline on Thursday.
The Federal Reserve also indicated the conclusion of quantitative tightening, which restricts liquidity in the financial system, and increased liquidity is generally a favorable factor for crypto prices.
Yet, there is typically a delay between the end of QT and the onset of quantitative easing, which involves actively injecting liquidity into the financial system, suggesting that crypto prices may continue to decrease until these liquidity injections materialize.
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Crypto liquidations surpass $1 billion after FOMC conference
After the Federal Reserve ended QT in 2019, Bitcoin (BTC) experienced a 35% decline, raising concerns among investors about a potential repeat in the current market cycle.
Powell’s remarks at the Wednesday FOMC press conference have left investors uncertain about future monetary policy, even though the Fed reduced interest rates by 25 basis points.
“Inflation has significantly decreased from its mid-2022 peak, yet remains somewhat high compared to our 2% target,” Powell mentioned.
He also noted challenges the FOMC faces in balancing the Fed’s dual mandate of ensuring maximum employment while maintaining price stability.
“There were strong disagreements regarding the approach for December. A further policy rate reduction at the December meeting is not guaranteed — far from it. Policy is not determined in advance,” he added.
More than $1.1 billion was liquidated from the crypto market within the following 24 hours, driving BTC’s price below $107,000 and below its 200-day exponential moving average (EMA), a key support level, according to data from Nansen.
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