Key Takeaways
What did Powell say?
Fed Chair Jerome Powell hinted the central bank could soon slow its balance-sheet runoff.
How did the crypto market react?
Bitcoin and Ethereum experienced brief rebounds, but overall sentiment remained muted as the total crypto market cap remained near $3.84 trillion.
On 14 October, Fed Chair Jerome Powell gave a speech at the 67th Annual Meeting of the National Association for Business Economics [NABE] in Philadelphia, Pennsylvania. The speech took a technical tone, focusing on the Fed’s balance-sheet strategy rather than new policy surprises.
Powell said the central bank may soon slow its balance-sheet runoff, a move that hints at easing liquidity pressure. This could be a significant boost for crypto assets like Bitcoin and Ethereum.
Yet, crypto markets remain subdued. The total market capitalization stands at $3.84 trillion, with daily trading volumes of nearly $257 billion, according to CoinMarketCap data. The broader market has been in a choppy recovery after the recent liquidation-driven sell-off.
Source: CoinMarketCap
Powell suggests QT is nearing its end
Powell said the Fed “may approach that point in coming months” where reserve levels are adequate. This implies a possible pause in quantitative tightening [QT].
That dovish tilt supported a short-lived rebound in digital-asset prices, but the tone stayed measured: no commitment to rate cuts, only “meeting-by-meeting” flexibility.
The Fed’s shift suggests a recognition that aggressive tightening could strain liquidity. A dynamic crypto investors are watching closely, given its sensitivity to dollar flows and treasury yields.
Sentiment turns neutral after Powell speech
Despite the less-hawkish message, market psychology remains cautious. The CMC Fear & Greed Index currently reads 42 (Neutral). It is up slightly from 40 yesterday but down sharply from last week’s 62 (Greed).
Source: CoinMarketCap
That cooling reflects investors digesting macro uncertainty and mixed inflation signals.
Historically, readings below 50 indicate risk aversion. It suggests traders are still hesitant to re-enter large positions despite stabilization in BTC and ETH.
Outlook
Crypto’s path now hinges on data delayed by the U.S. government shutdown, particularly next week’s CPI release.
If inflation softens and the Fed confirms a QT slowdown, the market could regain momentum into late October.
For now, Powell’s tempered tone offers a pause, not a pivot, and crypto is responding in kind.
