Bitcoin Falls to $66,000 as Fed Signals Weigh on Sentiment
Looking ahead, markets are focused on the upcoming release of the U.S. PCE price index—the Federal Reserve’s preferred inflation gauge.
Quick overview
- The cryptocurrency market is experiencing losses, with Bitcoin down 1.9% and Ethereum down 2.6%.
- Investor uncertainty is high due to upcoming U.S. macroeconomic data and mixed signals from the Federal Reserve.
- Political developments, including the nomination of a new Federal Reserve chair, are raising concerns about future monetary policy.
- Corporate sentiment is cautious, with Strategy Inc indicating it can withstand a Bitcoin price drop to $8,000.
Altcoins also came under pressure as investors pulled back from risk, extending losses across the crypto market.
The cryptocurrency market is trading in negative territory. Bitcoin fell 1.9% to $66,195.61, continuing to struggle to regain momentum amid negative signals from both the Federal Reserve and investors. Ethereum declined 2.6% to $1,933.27, while the broader altcoin market followed the same trend: Ripple (XRP) dropped 4.6%, BNB fell 2.2%, and Solana (SOL) retreated 3.4%.
Bitcoin has been trading on low volumes, reflecting investor uncertainty ahead of key U.S. macroeconomic data and the Federal Reserve’s interest-rate outlook. Minutes from the Fed’s January meeting revealed growing internal divisions over the long-term path of interest rates and inflation, with some officials even suggesting that further rate hikes could be necessary if inflation persists.
The minutes also showed disagreement over the economic impact of artificial intelligence, reinforcing a shift toward the U.S. dollar following their release.
Additional pressure came from political developments, after U.S. President Donald Trump nominated former Fed Governor Kevin Warsh as the new Federal Reserve chair, raising concerns that future monetary policy could be less flexible and less supportive of risk assets.
Corporate signals also weighed on sentiment. Strategy Inc, the largest corporate holder of Bitcoin, stated it is positioned to withstand a price drop as low as $8,000 per coin. The company disclosed that it purchased 2,486 Bitcoin for $168.4 million last week, raising its total holdings to 717,131 BTC, at an average purchase price of $67,710 per coin.
Looking ahead, markets are focused on the upcoming release of the U.S. PCE price index—the Federal Reserve’s preferred inflation gauge—which is expected to provide further signals on the future direction of interest rates and risk appetite across global markets.
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