Bitcoin and Crypto in Turmoil as Trump-Powell Tensions Escalate
The latest clash between former President Donald Trump and Federal Reserve Chair Jerome Powell has put markets on edge, with Bitcoin and crypto in turmoil as tensions between Trump and Powell escalate. This standoff comes at a time when the crypto sector is already wrestling with heavy ETF outflows, inflation worries, and broader risk-off sentiment.
Why the Trump-Powell Rift Matters for Crypto
The feud reignited after Trump criticized Powell for what he called “reckless tightening,” suggesting that higher interest rates are stifling U.S. economic growth. Powell, in response, defended the Fed’s independence, emphasizing its responsibility to keep inflation under control.
While political battles in Washington are nothing new, the fallout here is unique:
- Crypto is interest rate-sensitive. Higher rates often mean weaker appetite for speculative assets like Bitcoin and Ethereum.
- Political overhang creates uncertainty. Investors worry about potential policy shifts if Trump regains office.
- Institutional confidence at stake. ETF flows are highly sensitive to macro signals, and recent turbulence shows how politics can weigh on them.
Market Reaction: Bitcoin and Altcoins Slide
Bitcoin dipped below $113,500, while Ethereum slid under $4,100, both hit by investor caution. Altcoins including Solana and XRP also turned red, reflecting a broader risk-off move.
Data from CoinGlass showed over $180 million in crypto liquidations in the last 24 hours, with long positions bearing most of the losses.
ETF Flows Highlight Investor Hesitation
Spot Bitcoin and Ether ETFs, once the darlings of institutional inflows, saw back-to-back outflows exceeding $700 million this week. Analysts link this to investors hedging against political uncertainty and potential monetary policy shifts.
“Markets don’t like drama between the White House and the Fed. For crypto, which thrives on confidence, it’s a double blow,” said Rachel Lucas, analyst at BTC Markets.
Wider Economic Implications
The Trump-Powell feud also matters beyond crypto:
- A perception of Fed politicization could weaken the dollar.
- Safe-haven demand for assets like gold, and even Bitcoin, could rise if faith in central bank independence falters.
- Investors may pull liquidity from risk assets until the political dust settles.
Key Levels To Watch
For traders, the next few sessions are critical:
- Bitcoin support: $111,000 remains a key zone.
- Ethereum resistance: $4,200 must break for momentum to turn positive.
- Macro event risk: Powell’s next speech and Trump’s campaign rallies could drive sentiment.
Investor Takeaways
The clash between Trump and Powell highlights how deeply politics now intersect with crypto markets. For investors, the message is clear:
- Stay nimble as volatility spikes.
- Watch macro signals as closely as crypto-native metrics.
- Long-term conviction in BTC and ETH remains intact, but short-term turbulence is far from over.
Key Insight
With Bitcoin and crypto in turmoil as tensions between Trump and Powell escalate, digital assets face one of their most politically charged moments yet. Whether this fuels further downside—or sets up a rebound as safe-haven demand rises—will depend heavily on the next moves from Washington and the Fed.
