U.S. Treasury Secretary Scott Bessent said Thursday that the U.S. would lift restrictions designed to limit access by Chinese firms that buy technology the U.S. government deems sensitive.
According to Reuters, the relaxed restrictions were granted in return for China agreeing to suspend its export controls on rare earth minerals utilized in electronics and military defense applications.
Bessent's announcement follows several weeks of easing trade tensions between the 2 countries, which will likely be a positive catalyst for crypto prices.
However, the recent Federal Open Market Committee (FOMC) meeting and comments from Federal Reserve Chairman Jerome Powell, including that FOMC members had “very different views” on a December rate cut, caused markets to come across Thursday.
The crypto market was mostly within the red on Thursday. Source: TradingView
The Federal Reserve also signaled the top of quantitative tightening that restricts liquidity within the economic system, and better liquidity can also be a positive catalyst for crypto prices.
Still, there is often a niche between the top of the QT and the beginning of quantitative easing when liquidity is actively pumped through the economic system, meaning crypto prices can proceed to slip lower until liquidity injections arrive.
After FOMC conference, crypto liquidations top $1 billion
The price of Bitcoin (BTC) fell 35% in 2019 after the Federal Reserve ended the QT, raising fears amongst investors of an identical scenario in the present market cycle.
Powell's comments on the FOMC press conference on Wednesday also left investors uncertain in regards to the direction of monetary policy, though the Fed cut rates of interest by 25 basis points.
“Inflation has declined significantly from its peaks in mid-2022 but stays barely elevated relative to our 2% goal,” Powell said.
He also added that the FOMC is struggling to balance the Fed's dual mandate of maximum employment and stable prices.
“There were very different views on easy methods to proceed in December. An extra cut in the important thing rate of interest on the December meeting isn’t a given – quite the other. Politicians aren’t on a predetermined course,” he added.
According to data from Nansen, over $1.1 billion was liquidated from the crypto market in the next 24 hours, causing the value of BTC to fall below $107,000 and its 200-day Exponential Moving Average (EMA), a critical and dynamic support level.
