Bitcoin has witnessed a dip below the support area on Wednesday, resulting in the expected quick decline. The descending triangle comes amid Federal Reserve Chair Jerome Powell having a long-term hold on his “wait and see” approach to Fed interest rate cuts.
Similar to the stock market, Bitcoin’s price have become increasingly tied to interest rates and other macroeconomic indicators recently. As a result, escalating tensions between Powell and President Trump have caused BTC and other tokens to slump.
The world’s largest crypto dropped below $106,000 on Wednesday, extending its decline by 2.47% over the last two days. Last week, Bitcoin rose sharply by 7.32%, closing above $108,000.
However, since Monday, Bitcoin has continued its decline after facing a correction, closing below $106,000. At the time of writing, the token hovered around $106,998.
“Rate cut expectations, political tensions, and a declining apparent demand signal some short-term caution,” James Toledano, COO at Unity Wallet, told Cryptonews. However, he is optimistic that despite the scenario, markets would experience momentum into Q3.
Crypto Markets Dip Following Powell Comments
Fed Chair Powell on Tuesday commented on the President’s aggressive lobbying to cut interest rates. Trump has been putting pressure to follow central banks worldwide that have acted faster.
During the European Central Bank’s annual conference in Portugal, Powell said that the decision depends on “how the data evolves.” However, he did not hint at the timing of rate cuts.
Trump and Powell have been playing a blame game recently over the Fed rate cuts. The President had sent a handwritten note to Powell on Monday, accusing the Fed Chair “for allowing this to happen to the United States.”
“If they were doing their job properly, our Country would be saving Trillions of Dollars in Interest Cost,” Trump’s note read. Besides, the President has encouraged Powell to resign before his term as chair ends in May.
When asked about President Trump’s pressure on Tuesday, Powell said that he is very focused on just doing his job. Further, interest rates would have lowered by now if not for the president’s tariff agenda, Powell added.
Following Powell’s comment, Bitcoin saw a 1.3% slump, trading at $105,859 on Tuesday.
“President Trump is yet again voicing his intent to remove Fed Chair Jerome Powell, and this, more than any other macroeconomic factor, has the ability to cause more short-term financial havoc,” Toledano told Cryptonews.
However, he added that these provoke short‑term moves, while long‑term direction is driven by fundamentals. “Bitcoin is only going one way as far as the arc of history is concerned.”
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