• The cryptocurrency market experienced a sell-off following the Fed and BoJ rate cuts, driven by a hawkish projection.

• The Fed lowered its projection of rate cuts from four to two, leading to a sell-off in the crypto market.

• With November approaching, the crypto rally has become stagnant post mid-October flash crash.

After weeks of anticipation, the crypto market’s long-awaited rebound has failed to materialize.

Despite rate cuts from the Federal Reserve and the Bank of Japan (BoJ), both central banks signaled a more cautious stance — leaving risk assets like Bitcoin (BTC) and Ethereum (ETH) under pressure and investors uneasy heading into November.

The twin policy announcements on Oct. 29–30 were expected to inject confidence back into the markets.

Instead, they sparked uncertainty, as traders digested a hawkish message that suggested global monetary easing may be delayed until further notice.

Rate Cuts Without Relief

The Fed’s October 0.25% rate cut marked its second policy easing this year, but Chair Jerome Powell’s comments quickly erased optimism.

The central bank’s updated projections slashed its 2026 outlook for rate cuts from four to two, hinting at a “higher for longer” environment that spooked investors.

The BoJ followed suit, keeping rates steady, yet its own forecasts reflected growing concern over global inflation and U.S. trade policy under President Donald Trump’s renewed tariff strategy.

Together, the two decisions signaled that central banks are still prioritizing inflation control over growth — a stance that has left risk assets adrift.

Futures markets reacted immediately, pricing in a flatter 2026 rate path and even an 18% probability of a hike before the end of the year.

Crypto Feels the Pressure

Crypto markets were also swift to respond.

Bitcoin and Ethereum tumbled following the Fed’s remarks, with liquidations exceeding $700 million across major exchanges.

BTC fell below $107,000, while Ethereum sank into the $3,600 range, erasing nearly all the gains made earlier in “Uptober.”

The timing couldn’t have been worse.

After October’s black swan event, which saw more than $19 billion in leveraged positions wiped out and altcoins plunging up to 60% in hours, investors had hoped for a macro-driven rebound.

Instead, the renewed hawkishness reinforced caution, pushing traders to the sidelines.

Additionally, ETF inflows also dropped, with nearly a $1 billion leaving the funds.

Cautious Optimism Heading Into November

With central banks sending mixed signals and global trade tensions resurfacing, the crypto market appears stuck in a holding pattern.