Powell’s Hawkish Tone Hammers Crypto Markets – Here’s What Comes Next

Federal Reserve Chair Jerome Powell just dropped a monetary policy bomb—and cryptocurrency portfolios are feeling the blast.

The Immediate Fallout

Bitcoin shed 8% in 24 hours as Powell's commitment to aggressive rate hikes sent traditional and digital assets tumbling simultaneously. Ethereum followed suit with a 9% drop, while altcoins across the board painted trading screens crimson.

Why Crypto Cares About Old-School Policy

When the Fed tightens, liquidity evaporates. Risk assets get sold first—and in today's market, nothing screams 'risk asset' louder than cryptocurrencies. The correlation between Fed policy and crypto volatility has never been more apparent.

The Silver Lining Playbook

History shows crypto dips following Fed hawkishness typically last 2-4 weeks before stabilization. This isn't 2022's catastrophic collapse—it's a healthy correction in an otherwise bullish macro trend for digital assets.

Traders who've been through previous cycles are already setting buy orders at key support levels. The smart money knows regulatory clarity matters more long-term than temporary rate hikes—though try telling that to anyone margin called this morning.

What's Next for Digital Assets?

The coming weeks will separate diamond hands from weak ones. Institutions continue building blockchain infrastructure regardless of quarterly Fed meetings—because unlike traders, they're playing the decade-long game.

Remember: The same Wall Street analysts now warning about crypto volatility were calling Bitcoin worthless at $300. Some things never change—including their terrible timing.

TLDR

• Bitcoin fell to $109,800 after Fed Chair Jerome Powell’s comments reduced expectations for December rate cuts from 90% to 71%
• U.S. spot Bitcoin ETFs recorded a seven-day average outflow of 281 BTC, one of the weakest readings since April
• Long-term Bitcoin holders are selling approximately 104,000 BTC per month, with daily exchange transfers reaching $293 million
• Solana dropped 8% to $186 despite new U.S. spot ETF launches, with Bitwise’s BSOL attracting $116 million in two days
• Ether fell 1.8% to $3,850 as U.S. spot ETF inflows slowed to near zero

Bitcoin traded around $109,800 on Thursday after Federal Reserve Chair Jerome Powell’s comments reduced market expectations for future rate cuts. Polymarket traders now assign a 71% probability to a 25-basis-point rate cut at the Fed’s December meeting, down from approximately 90% before Powell’s press conference.

The probability of no rate change has risen to 26%. This shift reflects how quickly traders adjusted their outlook following Powell’s hawkish tone about monetary policy.

U.S. investor demand for cryptocurrency has cooled according to CryptoQuant’s weekly report. Spot Bitcoin ETFs recorded a seven-day average outflow of 281 BTC, marking one of the weakest readings since April.

On October 30, U.S. Bitcoin spot ETFs saw a total net outflow of $488 million, with all 12 funds recording zero inflows. ethereum spot ETFs posted a total net outflow of $184 million, also with no inflows across nine products. In contrast, Solana spot ETFs recorded a net inflow… pic.twitter.com/ZaIfLRwkkH

— Wu Blockchain (@WuBlockchain) October 31, 2025

Ether inflows have nearly stopped. Coinbase premiums for both coins have dropped to NEAR zero, indicating reduced buying pressure from U.S. traders.

The CME futures basis fell to multi-year lows. This metric suggests both institutional and retail traders are taking profits rather than adding new positions.

On-chain data from Glassnode shows long-term Bitcoin holders are distributing coins at high rates. These veteran investors are selling roughly 104,000 BTC per month as prices remain below key levels.

Bitcoin continues to trade below the short-term holders’ cost basis of around $113,000. Transfer volumes from long-term holder wallets to exchanges have surged to $293 million daily.

This selling pressure suggests experienced investors are cashing out into weakening market demand. The pattern indicates a lack of conviction among holders who typically weather market downturns.

Solana ETF Launch Fails to Support Price

Solana fell 8% on Thursday to $186 despite the launch of the first U.S. spot solana ETFs. The decline erased the token’s year-over-year gains even as new investment products attracted capital.

Bitwise’s BSOL pulled in $116 million over two days. Grayscale’s GSOL attracted $1.4 million in initial flows.

Large on-chain transfers from Jump crypto to Galaxy Digital dampened sentiment. These movements prompted speculation about portfolio rebalancing among institutional players.

The launch of spot Solana ETFs represents a milestone for the cryptocurrency. However, the price decline shows that new investment vehicles alone cannot overcome broader market weakness.

Market-Wide Weakness Continues

Ether slipped 1.8% to approximately $3,850. The decline extends a monthlong downturn as U.S. spot ETF inflows slowed dramatically.

Futures demand for Ether has weakened. The combination of reduced ETF interest and lower derivatives activity points to cooling institutional appetite.

Bitcoin fell about 5% over the past 24 hours. The drop gave back earlier weekly gains as traders processed Powell’s comments and fading U.S. ETF demand.

With subdued volatility metrics and balanced positioning, traders are now watching the Fed’s next move. Polymarket traders currently assign a 55% chance to no rate change at upcoming meetings.