Bitcoin rebounds dramatically! Powell unexpectedly "doves", the resistance level of $112,000 is instantly broken.

Fed Chairman Jerome Powell delivered a dovish monetary policy stance at the National Association for Business Economics annual meeting, emphasizing the rising risks in the labor market and suggesting that the Federal Open Market Committee (FOMC) is highly likely to cut interest rates again this month. Driven by this news, the price of Bitcoin rebounded, successfully breaking through the key resistance level of $112,000. Powell also revealed that the Fed may halt the reduction of its balance sheet (QT) in the coming months, a signal that monetary policy will shift from quantitative tightening to easing, injecting new liquidity and optimism into the Bitcoin market.

Powell's "dovish" stance boosts the market: interest rate cut expectations drive Bitcoin rebound

The remarks by the Fed chairman brought obvious liquidity expectations to the market, prompting a significant rebound in Bitcoin prices.

· The labor market risk is key.

Powell stated in his speech that, based on current data, the employment and inflation outlooks have not changed much since the September meeting. However, he reiterated that the risks to employment seem to have increased. Given that the FOMC implemented its first rate cut last month due to a softening labor market, market participants continue to price in the possibility of another rate cut this month.

· Bitcoin price breaks through 112,000 USD

Driven by Powell's dovish shift, the price of Bitcoin has risen sharply. According to data from TradingView, the price of Bitcoin has surpassed $112,000, trading at approximately $112,800 at the time of writing. Prior to this, the price of Bitcoin had earlier fallen to a low of $110,000, partly due to market concerns over a potential trade war between China and the United States.

· Expectation of increased Liquidity

Powell's dovish stance is a positive signal for Bitcoin, as another rate cut will further boost market liquidity. It's worth mentioning that earlier this month, when traders began pricing in a rate cut in October, the price of Bitcoin had already surged to an all-time high (ATH) of over $126,000.

Balance Sheet Signals: Transition from Quantitative Tightening to Easing

In addition to interest rate cut expectations, Powell's comments on the Fed's balance sheet also provide a long-term positive signal for the crypto market.

· Suggests that quantitative tightening (QT) is about to end

Powell hinted in his speech that the Fed may soon stop reducing its balance sheet, marking a possible shift in monetary policy from quantitative tightening to easing. He stated that the Fed might be close to the point of stopping the balance sheet reduction in the coming months.

· The significance for the crypto market

The end of quantitative tightening means that the cycle of tightening market liquidity is about to conclude. At the macroeconomic level, this is often seen as a favorable signal for risk assets, including cryptocurrencies, as it reduces the supply tightness of the dollar and may increase the market's risk appetite.

Conclusion

Fed Chairman Powell's concerns about labor market risks and the subsequent dovish statements have become key catalysts for the rebound in Bitcoin prices. While the market continues to digest expectations for interest rate cuts, Powell's signals regarding stopping balance sheet reduction further outline a more accommodative macro liquidity environment for risk assets such as Bitcoin. Despite ongoing concerns about the China-U.S. trade war, the Fed's policy shift has become the dominant force driving the rise in Bitcoin prices. Traders and investors will closely watch whether the FOMC meeting this month will officially announce interest rate cuts to confirm the impact of this macro positive on the market.

This article is news information and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions cautiously.