Crypto Markets Fall as Powell’s Fed Speech Triggers Mass ETF Exodus

TLDR

• Bitcoin price dropped to $109,800 following Federal Reserve Chair Jerome Powell’s hawkish stance on future interest rate cuts
• Spot Bitcoin ETF outflows averaged 281 BTC over seven days, marking the weakest performance since April 2025
• Long-term Bitcoin holders are distributing 104,000 BTC monthly with $293 million in daily exchange transfers
• Solana fell 8% to $186 despite Bitwise’s new BSOL ETF collecting $116 million in its first two days
• Market probability for December Fed rate cut dropped from 90% to 71% after Powell’s comments

Bitcoin traded at $109,800 on Thursday as Federal Reserve Chair Jerome Powell’s comments on interest rates dampened investor sentiment across cryptocurrency markets. The digital asset fell approximately 5% over 24 hours, erasing earlier weekly gains.

Powell’s hawkish tone during his press conference reduced market expectations for a December rate cut. Polymarket traders now place a 71% probability on a 25-basis-point reduction, down sharply from 90% before his remarks.

The chance of no rate change has increased to 26%. This rapid shift demonstrates how sensitive crypto markets remain to Federal Reserve policy signals.

U.S. spot Bitcoin ETFs recorded significant outflows according to CryptoQuant data. The seven-day average showed 281 BTC leaving these investment products, representing one of the weakest periods since April.

Coinbase premiums for Bitcoin and Ethereum have fallen to near zero. The CME futures basis dropped to multi-year lows, indicating both institutional and retail investors are taking profits.

Ether inflows through spot ETFs have nearly stalled. The second-largest cryptocurrency fell 1.8% to $3,850, extending a monthlong decline.

Long-Term Holders Exit Positions

On-chain analytics from Glassnode reveal that long-term Bitcoin holders are selling at elevated rates. These investors are distributing approximately 104,000 BTC per month as prices remain under pressure.

Bitcoin continues trading below the short-term holders’ cost basis of $113,000. This level represents a key resistance point that the cryptocurrency has struggled to reclaim.

Transfer volumes from long-term holder wallets to exchanges reached $293 million daily. These movements suggest experienced investors are cashing out rather than holding through current market conditions.

The selling pattern indicates weakening conviction among typically steadfast holders. These investors usually maintain positions during downturns but appear to be taking advantage of current price levels.

Solana ETF Launch Amid Price Decline

Solana dropped 8% to $186 despite the debut of U.S. spot Solana ETFs. The decline eliminated year-over-year gains for the cryptocurrency.

Bitwise’s BSOL ETF attracted $116 million in its first two days of trading. Grayscale’s GSOL collected $1.4 million in initial inflows.

Large transfers from Jump Crypto to Galaxy Digital raised questions about institutional portfolio adjustments. These on-chain movements contributed to negative sentiment around Solana’s price action.

The ETF launches mark an important development for Solana’s institutional adoption. However, the immediate price response shows that new investment products cannot offset broader market weakness.

Ether spot ETF inflows have slowed dramatically as institutional appetite cools. The combination of reduced ETF demand and lower futures activity points to a broader pullback from cryptocurrency exposure.

With volatility metrics subdued and positioning balanced, traders are focused on the Federal Reserve’s next moves. Polymarket data shows a 55% probability assigned to no rate change at upcoming meetings, reflecting uncertainty about monetary policy direction.

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