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Bitcoin Caught Between Hawkish Fed and Dovish Warsh

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Bitcoin Caught Between Hawkish Fed and Dovish Warsh

The Federal Reserve’s January meeting minutes revealed a surprisingly hawkish committee. Several officials openly discussed rate hikes. That sets the stage for a dramatic policy clash when Kevin Warsh takes over as chair this summer.

The Fed’s hawkish stance now threatens to box in Warsh before he even starts, raising the stakes for both monetary policy and crypto markets.

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A Committee Tilting Hawkish — Right Before a Leadership Change

The FOMC voted 10-2 on Jan. 28 to hold rates at 3.5%-3.75%. Governors Christopher Waller and Stephen Miran dissented. Both preferred a quarter-point cut, citing labor market risks.

But the broader committee leaned the other way. Several participants warned that further easing amid elevated inflation could signal a weakened commitment to the 2% target. A larger group favored holding rates steady. They wanted a “clear indication that disinflation was firmly back on track” before cutting again.

Most strikingly, several officials wanted the post-meeting statement to reflect possible “upward adjustments” to the federal funds rate. This was a direct reference to potential rate hikes.

Powell Out, Warsh In — And a Policy Collision Looms

Chair Jerome Powell’s term ends in May. He has two more meetings at the helm. Trump announced on Jan. 30 that former Fed Governor Warsh would replace him.

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Warsh has spoken in favor of lower rates. That aligns with Trump’s repeated calls for cheaper borrowing. The White House on Wednesday insisted recent data showed inflation was “cool and stable.”

But the committee’s hawkish majority may not cooperate. Rate decisions are made by 12 voting members. Only a few lean dovish. The rest see inflation risks as the top priority.

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Analysts noted that the committee’s hawkish tone could complicate Warsh’s confirmation process and limit his room to pivot toward cuts early in his tenure.

If confirmed, Warsh’s first meeting as chair would be in June. Futures traders price the next cut around the same time. But the Fed’s preferred inflation gauge — the PCE Price Index — is expected to re-accelerate in the coming months. That could delay any easing further.

Asian Liquidity Returns, Amplifying the Selloff

Bitcoin began sliding shortly after the minutes dropped during US afternoon trading. It fell from around $68,300 to below $66,500 by early Asian morning hours. That marked a 1.6% decline over 24 hours.

The timing mattered. Asian traders were returning from the Lunar New Year holiday. Rising volumes and turnover amplified the move lower. Escalating US-Iran tensions added fuel. Oil prices surged more than 4%, further weighing on risk appetite across crypto markets.

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Coinbase CEO Brian Armstrong called the decline psychological rather than fundamental. He said the exchange was buying back shares and accumulating Bitcoin at lower prices.

What Comes Next

The Fed’s next meeting is on March 17-18. A cut there is effectively off the table. Markets now look to June as the earliest window.

But the real question extends beyond timing. It is whether Warsh can steer a deeply divided committee toward cuts while inflation remains sticky. The hawkish majority has made its position clear. Changing that will require more than a new chair.

For Bitcoin, the macro backdrop remains challenging. The combination of a hawkish Fed, a contested leadership transition, and returning Asian liquidity points to continued volatility in the weeks ahead.

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Crypto World

Bitcoin Range-Bound Under Pressure as Analysts Eye $55,000

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Bitcoin Range-Bound Under Pressure as Analysts Eye $55,000


The longer Bitcoin remains rangebound, the more likely it is to fall further as the bear market deepens. 

Bitcoin is “range-bound under pressure,” having broken below the “True Market Mean,” slipping into a “defensive range toward the Realized Price,” of around $55,000, reported Glassnode on Wednesday. The on-chain analytics provider remained bearish, noting that demand across spot and derivative markets was weak.

“Spot flows and ETF demand remain weak, accumulation is fragile, and options positioning shows panic hedging fading, but not renewed bullish conviction.”

Glassnode noted that historically, deeper bear market phases have found their lower structural boundary around the Realized Price. This is a measure of the average acquisition cost of all circulating coins, which now stands near $54,900.

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This level is almost 18% lower than current prices and would put the fall from peak to 56.4%, which is much shallower than the last two bear markets.

Market in Controlled Consolidation

The analysts also noted that the Accumulation Trend Score sits near 0.43, well short of the 1.0 level that would signal serious large-entity buying.

Spot Cumulative Volume Delta (CVD), which tracks the difference between market buy orders and market sell orders over time, has turned firmly negative across major exchanges such as Binance and Coinbase, meaning sellers are in control.

Glassnode concluded that the market is “transitioning from reactive liquidation to controlled consolidation.”

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“For a durable recovery to emerge, renewed spot demand, sustained accumulation, and improving liquidity conditions will be required.”

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Bitcoin network activity has also collapsed, according to Santiment, which reported on Wednesday that there have been large declines in new and unique addresses as Bitcoin’s utility declined in 2025.

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“A justification for crypto beginning to see a true long-term relief rally will be when metrics like active addresses and network growth begin to rise.”

“BTC is still strengthening its bear trend,” observed analyst Willy Woo, who said that volatility is a key metric to detect trends. Bitcoin entered its bear market when volatility spiked upwards quickly, he said, before adding:

“Volatility then continues to climb, meaning the bear trend is strengthening. Then volatility finds a peak in the mid to late phase bear market… that’s when the bear trend starts to weaken.”

BTC Price Outlook

Bitcoin continues to weaken, dropping below $66,000 briefly in late trading on Wednesday. It came just shy of $67,000 during the Thursday morning Asian trading session, but had not reclaimed it at the time of writing.

The asset has been trading sideways for the past two weeks, and the path of least resistance appears to be downwards.

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Ethereum Foundation Outlines Main Priorities For 2026

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Ethereum, Vitalik Buterin

The Ethereum Foundation has announced it is targeting faster transactions, smarter wallets, better cross-chain interoperability, and quantum-resistant security as its “protocol priorities” in 2026.

In a statement published on Wednesday, the Ethereum Foundation outlined several goals, including continuing to scale the gas limit — the maximum amount of computational work a block can handle — “toward and beyond” 100 million, a major topic of discussion among the Ethereum community in 2025. 

Ethereum, Vitalik Buterin
Source: Ethereum Foundation

Some members of the Ethereum community anticipate that the gas limit will increase significantly this year. In November, Ethereum educator Anthony Sassano said that the goal of significantly increasing Ethereum’s gas limit to 180 million in 2026 is a baseline, not a best-case scenario. 

“Post-quantum readiness” is a focus for Ethereum

The foundation highlighted the Glamsterdam network upgrade, scheduled for the first half of 2026, as a major priority. It also emphasized “post-quantum readiness” as a priority in its trillion-dollar security initiative.

On Jan. 24, Ethereum researcher Justin Drake said in an X post that the foundation had “formed a new Post-Quantum (PQ) team.” 

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“Today marks an inflection in the Ethereum Foundation’s long-term quantum strategy,” Drake said.

The Ethereum Foundation said it will also focus on improving user experience in 2026, with an emphasis on enhancing smart wallets through native account abstraction and enabling smoother interactions between blockchains via interoperability.