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Bitcoin (BTC-USD) fell by around 2% over the past 24 hours, after the US Federal Reserve cut interest rates by 25 basis points but signalled that another reduction in December is far from assured.

Notably, Fed chair Jerome Powell remarked at Wednesday's press conference that a “further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it.”

This prompted a risk-off move across crypto markets, with bitcoin (BTC-USD) sliding to now sit at around the $110,900 (£83,995) mark. The total global cryptocurrency market capitalisation now stands at $3.84tn, down 1.4% over the past 24 hours.

"Markets were blindsided less by the rate cut itself than by Chair Powell’s emphasis that a December reduction is not automatic," said Timothy Misir, head of research at BRN. "The FOMC delivered a 25bps cut as expected but Powell’s tone removed forward certainty and tightened financial conditions."

"That’s a classic recipe for headline-driven volatility. And the structural story for crypto such as tighter supply, institutional adoption, network fundamentals remains intact, but short-term price action will be dominated by flow dynamics and macro headlines."

Meanwhile, flows into spot bitcoin (BTC-USD) exchange-traded funds (ETFs) turned negative, with around $471m in net outflows recorded on Wednesday. Spot bitcoin ETFs allow investors to gain exposure to bitcoin’s price through traditional stock markets, without having to buy or store the cryptocurrency directly.

Fabian Dori, chief investment officer at Sygnum Bank, said the crypto fear & greed index has shifted into “fear” territory. He noted that the latest US CPI report showed headline inflation rising to 3% year-on-year, slightly above expectations, while core inflation also came in at 3.0%.

However, Dori pointed to signs that sentiment could stabilise. "Given constructive business-cycle signals, resilient corporate earnings, accommodative liquidity, and ongoing institutional adoption of crypto, CPI readings that modestly undershot expectations and validated the Fed’s projection of a mid-term easing in inflation pressures could help reignite investor risk appetite,” he said.

Geopolitical developments have also influenced market mood. President Trump’s meeting with President Xi in Beijing was described by both sides as “highly productive,” with Trump calling it a “12 out of 10.” Early indications suggest potential reciprocal reductions in port fees and a temporary pause on technology export restrictions.

Improved US–China dialogue could ease pressure on global growth expectations heading into year-end. However, according to Timothy Misir, the market remains caught between Powell’s cautious messaging and renewed hopes of progress on trade.

"However, the market’s next move will depend on whether rhetoric translates into policy, and whether any economic cooperation agreement emerges before December’s critical FOMC meeting," he added.