Federal Reserve Chair Jerome Powell is poised to address the U.S. economic outlook and monetary policy during a keynote speech at the National Association for Business Economics (NABE) annual meeting in Philadelphia on Tuesday. Titled “Economic Outlook and Monetary Policy,” this speech arrives amid a period of market volatility, influenced heavily by renewed trade tensions between the U.S. and China, alongside significant fluctuations in digital asset markets.
Powell’s insights may have a considerable impact on market expectations for interest rate adjustments and broader monetary policy, which in turn could dictate the trajectory of the cryptocurrency market. Following President Donald Trump’s announcement last week to implement a 100% tariff on all Chinese imports starting November 1, the global markets experienced heightened uncertainty. This news resulted in a staggering decline of over $125 billion in total crypto market capitalization in mere hours.
Bitcoin, which had briefly surged past $122,000, plummeted to below $105,000, even briefly dipping below $102,000 over the weekend. Ethereum was not spared, experiencing nearly a 20% drop, while other cryptocurrencies such as Solana, XRP, and BNB also reported losses ranging from 12% to 18%. The rapid downturn led to massive liquidations across trading platforms, with data from CoinGlass revealing that over 1.66 million traders suffered losses, accumulating to $19.33 billion in liquidated positions. Bitcoin and Ethereum were particularly hit, contributing nearly $10 billion to these losses and marking one of the year’s most dramatic deleveraging events.
The Crypto Fear & Greed Index reflected this anxiety, plummeting from a “Greed” level of 64 on Friday to a “Fear” level of 27 by Saturday, indicating the most significant sentiment shift in six months. According to analytics firm Santiment, the sell-off was not solely attributable to tariffs; it highlighted deeper issues, including excessive leverage and overly aggressive long positions. Analysts from The Kobeissi Letter supported this view, characterizing the market reaction as a “forced unwind” caused by a saturation of long exposure.
As traders await Powell’s remarks, their focus will be on any indications regarding the timing and extent of potential interest rate cuts. Compounding the uncertainty, futures markets are currently predicting a 97% likelihood of a 25 basis point cut in October, followed by an 89% chance in December.
The upcoming speech by Powell represents a critical moment for both the U.S. economy and the cryptocurrency market, with analysts anticipating that his comments may serve to either exacerbate the current turmoil or provide a path toward stabilization. With the financial world on edge, there remains hope that clearer guidance from the Federal Reserve could help restore confidence in the markets.