Crypto Markets Struggle Amid Rate Cuts and US-China Trade Talks

By: crypto insight|2025/10/31 16:30:08
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Key Takeaways

  • Crypto prices are facing downward pressure from macroeconomic uncertainties, even with positive developments like interest rate cuts and eased US-China trade tensions.
  • The Federal Reserve’s signals on ending quantitative tightening could boost liquidity, but a potential gap before quantitative easing might lead to further crypto market dips.
  • Bitcoin experienced a significant 35% drop in 2019 after a similar end to quantitative tightening, raising concerns for the current cycle.
  • Over $1.1 billion in crypto liquidations followed the FOMC meeting, pushing Bitcoin below key support levels like its 200-day exponential moving average.
  • Ongoing discussions between the US and China on trade, including restrictions on technology and rare earth minerals, offer hope but haven’t yet lifted crypto sentiment.

Imagine stepping into a bustling marketplace where the air is thick with anticipation, vendors shouting deals, and buyers weighing their options carefully. That’s the crypto market right now—vibrant, unpredictable, and influenced by forces far beyond its borders. Despite what should be good news, like central banks easing up on interest rates and superpowers like the US and China finding common ground on trade, crypto prices are still taking a beating. It’s like throwing a party where the music’s great and the snacks are plentiful, but everyone’s too worried about the storm clouds outside to dance. In this piece, we’ll dive into why the crypto market is bleeding red, unpack the latest from the Federal Reserve, and explore how geopolitical shifts are playing into this. We’ll also touch on how platforms like WEEX are helping traders navigate these choppy waters with reliability and smart tools, aligning perfectly with the need for stability in uncertain times.

Why Crypto Prices Are Ignoring the Good News

Let’s start by painting the picture. You’ve got macroeconomic jitters and geopolitical chess games keeping investors on edge. Normally, when interest rate cuts hit the scene or trade tensions cool off, you’d expect crypto prices to perk up—like a plant getting watered after a dry spell. But that’s not happening here. Take the recent announcement from the US Treasury Secretary about suspending restrictions on Chinese companies accessing sensitive US technology. In return, China agreed to pause its export controls on rare earth minerals, those crucial elements used in everything from smartphones to military gear. This kind of back-and-forth, as reported in various news outlets, has been brewing for weeks, softening the edges of what was a heated trade standoff.

You’d think this would be a shot in the arm for crypto, right? After all, less tension between economic giants often means smoother global flows of capital, which crypto thrives on. It’s like two feuding neighbors finally agreeing to share the backyard grill—everyone benefits. Yet, crypto prices remain depressed. Why? Because the broader uncertainty is overshadowing these wins. Investors are looking at the bigger canvas, where brushes of doubt from central bank meetings are smearing the optimism.

Speaking of which, let’s zoom in on the Federal Open Market Committee (FOMC) gathering. The Federal Reserve Chair shared that committee members hold “strongly differing views” on whether to cut interest rates again in December. This came right after they trimmed rates by 25 basis points, a move designed to stimulate the economy. But the chair’s words during the press conference painted a picture of caution: inflation has dropped from its peaks in mid-2022 but still hovers above the 2% target. Balancing full employment with stable prices? It’s a tightrope walk, and the Fed admitted it’s not easy.

Here’s where it gets interesting—and a bit nerve-wracking for crypto enthusiasts. The Fed also hinted at wrapping up quantitative tightening, that policy where they restrict liquidity in the system. Ending QT is generally a plus for crypto because it paves the way for more money flowing freely, much like opening the floodgates on a dam. Higher liquidity means more capital chasing assets like Bitcoin and altcoins. But there’s a catch: there’s often a lag between stopping the tightening and starting quantitative easing, where they actively pump money in. During that in-between phase, things can get rocky, and crypto prices might dip even lower before bouncing back.

To put this in perspective, think back to 2019 (as of that year). When the Federal Reserve ended quantitative tightening back then, Bitcoin’s price tumbled by 35%. It’s a stark reminder, like revisiting an old scar that still aches in bad weather. Investors are eyeing this history warily, fearing a repeat in the current market cycle. And with the chair emphasizing that policy isn’t on autopilot—a December rate cut isn’t guaranteed—the uncertainty spiked, leading to a market stumble.

The Ripple Effect: Liquidations and Market Metrics

Now, let’s talk about the immediate fallout. Following that FOMC press conference, the crypto market saw over $1.1 billion in liquidations within 24 hours. That’s like a massive wave crashing over leveraged positions, wiping them out. Bitcoin, the king of crypto, slipped below $107,000 and even dipped under its 200-day exponential moving average—a key support level that’s dynamic and often signals broader trends. Data from analytics platforms underscores this pain point, showing how quickly sentiment can sour.

This isn’t just numbers on a screen; it’s real money evaporating for traders who bet big on upward momentum. Picture a high-stakes poker game where the dealer suddenly changes the rules mid-hand—players fold fast, and the pot shrinks. The chair’s comments on inflation and the dual mandate of employment and pricing added to the fog. “Inflation has eased significantly from its highs in mid-2022, but remains somewhat elevated relative to our 2% target goal,” he noted. And on the debate for December: “There were strongly differing views about how to proceed… A further reduction in the policy rate at the December meeting is not a foregone conclusion—far from it.”

In this environment, platforms that prioritize user security and intuitive trading become invaluable. WEEX, for instance, stands out by aligning its brand with trader empowerment, offering robust tools for risk management during volatile periods. It’s like having a seasoned navigator on a stormy sea, helping you chart a course without getting capsized. This brand alignment emphasizes transparency and innovation, making it a go-to for those looking to weather market storms while capitalizing on opportunities.

Geopolitical Twists and Their Crypto Impact

Shifting gears to the US-China angle, the Treasury chief’s statement about reaching a “substantial” trade framework is worth dissecting. By easing restrictions on tech access in exchange for China’s hold on rare earth exports, it’s a pragmatic step toward de-escalation. These minerals are the unsung heroes in electronics and defense tech, so uninterrupted supply chains could stabilize industries that indirectly buoy crypto—think blockchain hardware and mining operations.

But why isn’t this translating to crypto gains? It’s because markets are forward-looking beasts. They price in not just the news but the “what ifs.” What if talks break down again? What if inflation rears up, forcing the Fed’s hand? These questions create a hesitancy that’s palpable. Compare it to a seesaw: on one side, positive catalysts like rate cuts and trade easings; on the other, the weight of uncertainty tipping the balance downward.

To back this up, historical patterns show that crypto often mirrors broader economic sentiments. During past trade war peaks, Bitcoin and altcoins suffered from risk-off moods. Now, with the US economy and China’s policies in flux, it’s no surprise prices are subdued. Yet, there’s optimism in the air—higher liquidity from ending QT could eventually lift all boats, including crypto.

Expanding Horizons: Frequently Searched Questions and Social Buzz

As we navigate this topic, it’s helpful to consider what people are actually asking online. Based on trends as of 2025, some of the most frequently searched questions on Google related to this include: “Why is the crypto market down despite rate cuts?” “What impact do US-China trade talks have on Bitcoin prices?” and “Will the Federal Reserve cut rates in December?” These queries highlight a thirst for understanding how macro events ripple into digital assets.

On Twitter (now X), discussions have been buzzing, especially around hashtags tied to Bitcoin price movements and Federal Reserve decisions. As of October 31, 2025, trending topics include debates on whether the end of quantitative tightening will spark a bull run, with users sharing charts comparing the 2019 drop to current patterns. One notable Twitter post from a prominent analyst (@CryptoEconWatch) stated: “Fed’s QT end signals liquidity boost, but don’t ignore the lag—crypto could test lower supports before rebounding. #Bitcoin #Fed.” Official announcements, like the Fed’s latest minutes released this week, reinforce the “differing views” on December cuts, adding fuel to online conversations.

Even more recently, a US Treasury update on October 30, 2025, confirmed ongoing negotiations, with hints of further concessions on tech exports. This has sparked threads on how such deals could enhance global crypto adoption by stabilizing supply chains for mining hardware. WEEX has been part of this narrative too, with their official account posting: “In volatile markets, our advanced risk tools help you stay ahead. Aligning with global shifts for smarter trading. #CryptoTrading.” It’s a testament to how brands like WEEX are embedding themselves in these discussions, offering value through education and features that resonate with real-time events.

Drawing Parallels: Lessons from History and Analogies for Today

To make this relatable, let’s use an analogy. The crypto market is like a race car: rate cuts are the turbo boost, trade deals the smooth track, but uncertainty is the fog on the windshield. You can’t speed ahead if you can’t see. Historically, events like the 2019 QT end taught us that patience is key—Bitcoin’s 35% fall (as of 2019) was followed by recovery once liquidity flowed. Today, with inflation still “somewhat elevated,” per the Fed chair, we’re in a similar holding pattern.

Contrast this with bullish periods, like when quantitative easing kicked in post-2008 crisis—assets soared. Evidence from market data shows that crypto liquidations spike during policy ambiguity, as seen in the $1.1 billion wipeout. But platforms committed to brand alignment, like WEEX, shine here by providing low-latency trading and educational resources, helping users turn insights into action without the hype.

This isn’t speculation; it’s patterned on real data. For instance, Nansen’s metrics on Bitcoin dipping below the 200-day EMA underscore the technical breakdowns. By comparing to past cycles, we see potential for upside once the liquidity gap closes. It’s persuasive proof that while short-term pain hurts, long-term alignments—like stable trade policies and WEEX’s focus on user-centric innovation—could pave the way for growth.

Navigating Uncertainty: Strategies and Forward Outlook

So, what does this mean for you, the reader? If you’re dipping your toes into crypto or already knee-deep, it’s about staying informed and agile. The interplay of US-China negotiations and Fed policies creates a dynamic landscape. Positive steps, like the eased restrictions, suggest a thawing that could indirectly support crypto through better economic stability.

Yet, the market’s reaction tells us patience is crucial. As liquidity builds post-QT, we might see that upward swing. Think of it as planting seeds in fertile soil—rate cuts and trade deals prepare the ground, but it takes time for growth. In the meantime, aligning with reliable platforms enhances your edge. WEEX, with its emphasis on secure, efficient trading, embodies this by offering features that mitigate risks, fostering trust and credibility in a space often criticized for volatility.

As we wrap this up, remember: the crypto world isn’t isolated. It’s woven into the fabric of global economics, responding to every Fed whisper and trade handshake. By understanding these connections, you’re better equipped to ride the waves, turning potential downturns into opportunities.

FAQ

Why are crypto prices falling despite interest rate cuts?

Crypto prices are declining due to overriding macroeconomic uncertainties and the lag between ending quantitative tightening and starting easing, which delays liquidity boosts.

How do US-China trade negotiations affect Bitcoin?

These negotiations can stabilize global supply chains, potentially supporting Bitcoin by reducing geopolitical risks, though current uncertainty has muted positive impacts.

What happened to Bitcoin after the 2019 end of quantitative tightening?

Bitcoin fell by 35% in 2019 following the end of quantitative tightening, sparking fears of a similar pattern in the current cycle.

Will the Federal Reserve cut rates in December?

The Fed chair indicated it’s not guaranteed, with committee members holding strongly differing views, making it far from a foregone conclusion.

How can traders manage risks in volatile crypto markets?

Traders can use risk management tools on platforms like WEEX, focusing on support levels like the 200-day EMA and staying updated on Fed and trade developments for informed decisions.

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Debunking the AI Doomsday Myth: Why Establishment Inertia and the Software Wasteland Will Save Us

Original Title: Against Citrini7Original Author: John Loeber, ResearcherOriginal Translation: Ismay, BlockBeats


Editor's Note: Citrini7's cyberpunk-themed AI doomsday prophecy has sparked widespread discussion across the internet. However, this article presents a more pragmatic counter perspective. If Citrini envisions a digital tsunami instantly engulfing civilization, this author sees the resilient resistance of the human bureaucratic system, the profoundly flawed existing software ecosystem, and the long-overlooked cornerstone of heavy industry. This is a frontal clash between Silicon Valley fantasy and the iron law of reality, reminding us that the singularity may come, but it will never happen overnight.


The following is the original content:


Renowned market commentator Citrini7 recently published a captivating and widely circulated AI doomsday novel. While he acknowledges that the probability of some scenes occurring is extremely low, as someone who has witnessed multiple economic collapse prophecies, I want to challenge his views and present a more deterministic and optimistic future.


Never Underestimate "Institutional Inertia"


In 2007, people thought that against the backdrop of "peak oil," the United States' geopolitical status had come to an end; in 2008, they believed the dollar system was on the brink of collapse; in 2014, everyone thought AMD and NVIDIA were done for. Then ChatGPT emerged, and people thought Google was toast... Yet every time, existing institutions with deep-rooted inertia have proven to be far more resilient than onlookers imagined.


When Citrini talks about the fear of institutional turnover and rapid workforce displacement, he writes, "Even in fields we think rely on interpersonal relationships, cracks are showing. Take the real estate industry, where buyers have tolerated 5%-6% commissions for decades due to the information asymmetry between brokers and consumers..."


Seeing this, I couldn't help but chuckle. People have been proclaiming the "death of real estate agents" for 20 years now! This hardly requires any superintelligence; with Zillow, Redfin, or Opendoor, it's enough. But this example precisely proves the opposite of Citrini's view: although this workforce has long been deemed obsolete in the eyes of most, due to market inertia and regulatory capture, real estate agents' vitality is more tenacious than anyone's expectations a decade ago.


A few months ago, I just bought a house. The transaction process mandated that we hire a real estate agent, with lofty justifications. My buyer's agent made about $50,000 in this transaction, while his actual work — filling out forms and coordinating between multiple parties — amounted to no more than 10 hours, something I could have easily handled myself. The market will eventually move towards efficiency, providing fair pricing for labor, but this will be a long process.


I deeply understand the ways of inertia and change management: I once founded and sold a company whose core business was driving insurance brokerages from "manual service" to "software-driven." The iron rule I learned is: human societies in the real world are extremely complex, and things always take longer than you imagine — even when you account for this rule. This doesn't mean that the world won't undergo drastic changes, but rather that change will be more gradual, allowing us time to respond and adapt.


The Software Industry Has "Infinite Demand" for Labor


Recently, the software sector has seen a downturn as investors worry about the lack of moats in the backend systems of companies like Monday, Salesforce, Asana, making them easily replicable. Citrini and others believe that AI programming heralds the end of SaaS companies: one, products become homogenized, with zero profits, and two, jobs disappear.


But everyone overlooks one thing: the current state of these software products is simply terrible.


I'm qualified to say this because I've spent hundreds of thousands of dollars on Salesforce and Monday. Indeed, AI can enable competitors to replicate these products, but more importantly, AI can enable competitors to build better products. Stock price declines are not surprising: an industry relying on long-term lock-ins, lacking competitiveness, and filled with low-quality legacy incumbents is finally facing competition again.


From a broader perspective, almost all existing software is garbage, which is an undeniable fact. Every tool I've paid for is riddled with bugs; some software is so bad that I can't even pay for it (I've been unable to use Citibank's online transfer for the past three years); most web apps can't even get mobile and desktop responsiveness right; not a single product can fully deliver what you want. Silicon Valley darlings like Stripe and Linear only garner massive followings because they are not as disgustingly unusable as their competitors. If you ask a seasoned engineer, "Show me a truly perfect piece of software," all you'll get is prolonged silence and blank stares.


Here lies a profound truth: even as we approach a "software singularity," the human demand for software labor is nearly infinite. It's well known that the final few percentage points of perfection often require the most work. By this standard, almost every software product has at least a 100x improvement in complexity and features before reaching demand saturation.


I believe that most commentators who claim that the software industry is on the brink of extinction lack an intuitive understanding of software development. The software industry has been around for 50 years, and despite tremendous progress, it is always in a state of "not enough." As a programmer in 2020, my productivity matches that of hundreds of people in 1970, which is incredibly impressive leverage. However, there is still significant room for improvement. People underestimate the "Jevons Paradox": Efficiency improvements often lead to explosive growth in overall demand.


This does not mean that software engineering is an invincible job, but the industry's ability to absorb labor and its inertia far exceed imagination. The saturation process will be very slow, giving us enough time to adapt.


Redemption of "Reindustrialization"


Of course, labor reallocation is inevitable, such as in the driving sector. As Citrini pointed out, many white-collar jobs will experience disruptions. For positions like real estate brokers that have long lost tangible value and rely solely on momentum for income, AI may be the final straw.


But our lifesaver lies in the fact that the United States has almost infinite potential and demand for reindustrialization. You may have heard of "reshoring," but it goes far beyond that. We have essentially lost the ability to manufacture the core building blocks of modern life: batteries, motors, small-scale semiconductors—the entire electricity supply chain is almost entirely dependent on overseas sources. What if there is a military conflict? What's even worse, did you know that China produces 90% of the world's synthetic ammonia? Once the supply is cut off, we can't even produce fertilizer and will face famine.


As long as you look to the physical world, you will find endless job opportunities that will benefit the country, create employment, and build essential infrastructure, all of which can receive bipartisan political support.


We have seen the economic and political winds shifting in this direction—discussions on reshoring, deep tech, and "American vitality." My prediction is that when AI impacts the white-collar sector, the path of least political resistance will be to fund large-scale reindustrialization, absorbing labor through a "giant employment project." Fortunately, the physical world does not have a "singularity"; it is constrained by friction.


We will rebuild bridges and roads. People will find that seeing tangible labor results is more fulfilling than spinning in the digital abstract world. The Salesforce senior product manager who lost a $180,000 salary may find a new job at the "California Seawater Desalination Plant" to end the 25-year drought. These facilities not only need to be built but also pursued with excellence and require long-term maintenance. As long as we are willing, the "Jevons Paradox" also applies to the physical world.


Towards Abundance


The goal of large-scale industrial engineering is abundance. The United States will once again achieve self-sufficiency, enabling large-scale, low-cost production. Moving beyond material scarcity is crucial: in the long run, if we do indeed lose a significant portion of white-collar jobs to AI, we must be able to maintain a high quality of life for the public. And as AI drives profit margins to zero, consumer goods will become extremely affordable, automatically fulfilling this objective.


My view is that different sectors of the economy will "take off" at different speeds, and the transformation in almost all areas will be slower than Citrini anticipates. To be clear, I am extremely bullish on AI and foresee a day when my own labor will be obsolete. But this will take time, and time gives us the opportunity to devise sound strategies.


At this point, preventing the kind of market collapse Citrini imagines is actually not difficult. The U.S. government's performance during the pandemic has demonstrated its proactive and decisive crisis response. If necessary, massive stimulus policies will quickly intervene. Although I am somewhat displeased by its inefficiency, that is not the focus. The focus is on safeguarding material prosperity in people's lives—a universal well-being that gives legitimacy to a nation and upholds the social contract, rather than stubbornly adhering to past accounting metrics or economic dogma.


If we can maintain sharpness and responsiveness in this slow but sure technological transformation, we will eventually emerge unscathed.


Source: Original Post Link


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