US Treasury Secretary Scott Besent said on Thursday that the United States will suspend restrictions designed to limit Chinese companies’ access to technology the US government considers sensitive.
The restrictions were eased in exchange for China’s agreement to suspend export controls on rare earth metals used in electronics and military defense applications, according to the British Daily Mail. Reuters.
Becent’s announcement comes several weeks after an easing of trade tensions between the two countries, which is usually a positive catalyst for cryptocurrency prices.
However, the recent meeting of the Federal Open Market Committee (FOMC) and Federal Reserve Chairman Jerome Powell commentsIncluding that members of the Federal Open Market Committee had “strongly divergent views” on cutting interest rates in December, causing markets to tumble on Thursday.
The Fed also signaled the end of quantitative tightening, which restricts liquidity in the financial system, and higher liquidity is also a positive catalyst for cryptocurrency prices.
Despite this, there is usually a gap between the end of the QT period and the beginning of QE, when liquidity is actively pumped through the financial system, meaning that cryptocurrency prices can fall further to the downside until the liquidity injection arrives.
Related to: US Treasury Secretary Bescent says a “substantial” trade framework has been reached with China
Cryptocurrency liquidations exceeded $1 billion after the Federal Open Market Committee conference
The price of Bitcoin (BTC) fell 35% in 2019 after the Federal Reserve ended the QT period, raising investor concerns about a similar scenario during the current market cycle.
Powell’s comments at the Federal Open Market Committee’s press conference on Wednesday also left investors uncertain about the direction of monetary policy, despite the Fed cutting interest rates by 25 basis points.
“Inflation has eased significantly from its highs in mid-2022, but remains fairly high compared to our 2% target,” Powell said.
He also added that the FOMC is having trouble balancing the Fed’s dual mandate of maximum employment and stable pricing.
He added: “There were sharply differing views on how to proceed in December. Further rate cuts at the December meeting are not a foregone conclusion – far from it. Policy is not on a pre-determined path.”
More than $1.1 billion was liquidated from the cryptocurrency market in the next 24 hours, taking BTC’s price below $107,000 and its 200-day exponential moving average (EMA), a critical and dynamic support level. According to For data from Nansen.
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