Fed Chairman's Remarks Stall Bitcoin (BTC) Recovery: Market Impact Analysis

Federal Reserve Chairman Jerome Powell was rather hawkish in a speech on Wednesday. He said that because the tariffs were larger than the market expected, the economic effects would also be bigger. He forecast high inflation and reduced growth leading to stagflation. Bitcoin (BTC) lost momentum and experienced a sharp fall following the speech. 

Hawkish fed chairman puts brakes on Bitcoin

Speaking at the Economic Club of Chicago on Wednesday, Fed chairman Powell showed he is still impervious to any influence from President Trump, stating that the ongoing high tariffs environment, leading to potentially higher inflation, was likely to impact on the Fed’s dual-mandate goals.

The generally hawkish tone of the speech, and the chairman’s concern over the potential for higher inflation, suggested that the Federal Reserve would not be likely to make a rate cut in May. It could also be that unless there is a drastic alteration in the economy, even June’s potential cut might not take place.

Powell’s speech couldn’t have come at a worse time for the Bitcoin bulls. Just as it looked like the king of the cryptocurrencies was going to go full steam ahead for a trend change, the Fed chairman’s comments partially applied the brakes, slowing down the $BTC price in mid-charge.

$BTC still up despite market shocks

Source: TradingView

The $BTC price is up on Thursday, in spite of Wednesday’s shocks, and in spite of the considerable tremors felt by the U.S. stock market. The S&P 500 was down 2.24% at Wednesday’s close, and the Nasdaq was just over 3% down.

The $BTC price is jagging along sideways, just under the $84,700 resistance. Below is horizontal support at $84,000 and $82,500, while the target for the bulls is still the major prize of the higher high at $88,600.

Can $BTC rally in the face of market uncertainty?

Source: TradingView

The weekly chart for $BTC shows that an upside rally does have legs if some momentum can be obtained. The question must be: “Can $BTC rally in the face of tariff wars and a very lukewarm approach to rate cuts by the Fed?

If one takes into account that global liquidity is still on the rise, and that currency printing is probably going to happen sooner or later, the answer may be “yes”. 

The indicators at the bottom of the chart are still shaping bullish, therefore we will see if Bitcoin can produce the goods and rally in the face of the Fed, tariffs, and an uncertain stock market. The rest of this week could hold some clues.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.