Powell's hawkish remarks dealt a heavy blow to Bitcoin: After briefly falling below $108,000, it struggled to regain $110,000.

Local time on Thursday, Bitcoin continued to fall after Federal Reserve Chairman Jerome Powell made hawkish remarks, falling by 3.1% at one point, breaking below the $108,000 mark. However, during the European session, buyer demand pushed the price back up to above $110,000. As of the time of writing, Bitcoin was trading around $111,315, showing a moderate recovery after three consecutive bearish closes earlier this week. The day before, the Federal Reserve announced a 0.25 percentage point cut in the benchmark interest rate to 3.75%-4%, marking the second consecutive rate cut. However, Powell warned investors not to assume that there would continue to be rate cuts. Interest rate swaps data showed that the probability of a 25 basis point rate cut in December had fallen from nearly 100% to about 60%. The decline in Bitcoin accelerated after the meeting between the leaders of China and the U.S., but selling quickly slowed. Trump said that both sides had reached a trade agreement, with the U.S. immediately halving the fentanyl-related tariffs imposed on Chinese goods. Charlie Sherry, CFO of BTC Markets, stated that Powell's remarks triggered risk aversion sentiment while the meeting between the U.S. and China leaders stirred the market. Despite some tech stocks rising, cryptocurrencies did not follow suit, indicating relative weakness in digital assets. Following Powell's speech, U.S. Treasury yields and the dollar strengthened, while stock index futures declined. Augustine Fan, partner at SignalPlus, pointed out that there is "severe division" within the Federal Reserve, coupled with the government shutdown and data disruptions, which may make the central bank more cautious, waiting for the December meeting to make decisions. With the release of the statement, Bitcoin fell to $109,000 and then slightly recovered, closing near $110,000. The lukewarm response confirmed that the rate cut had already been factored into the market expectations. Despite the rate cut, a bearish trend persists in the entire cryptocurrency market this week. Bitcoin's current decline is 4% for the week, reflecting uncertainty among traders about whether liquidity conditions will improve enough to reignite risk appetite. However, the fundamental positioning indicates that optimism is slowly returning. Data shows that Bitcoin's long vs short ratio has climbed to over 2.0, with open interest rising from $34 billion to $35 billion, suggesting traders are increasing leverage exposure in anticipation of a possible rebound. From a technical standpoint, the 4-hour and daily RSI readings are still in bearish territory, not yet oversold, suggesting that the correction may not be fully over. For Bitcoin to continue to rise, it must break through the cluster of resistance formed by the 20, 50, and 100 EMAs on the 4-hour chart, all converging around $112,000. Breaking this level could change short-term sentiment and establish a bullish control. On the other hand, if momentum weakens again, the next downside target will be last week's low of $106,600. From the upside perspective, if there is a successful rebound and resistance is cleared, the price of Bitcoin could return to $116,000, and if follow-up buying strengthens, the price could rise to $118,000. The next few trading days will determine whether Bitcoin will transition from a short-term adjustment to a new bullish phase after the Federal Reserve's latest policy shift.