Bitcoin surged past $116,000, reaching a new multi-month high, before experiencing a sharp intraday pullback following Federal Reserve Chair Jerome Powell’s hawkish stance on inflation and tariffs. The brief rally reflected strong momentum, but market sentiment shifted quickly as Powell’s remarks reignited interest rate concerns.
Bitcoin Hits $116K Before Swift Reversal
In early trading Wednesday, Bitcoin rallied to $118,400, marking one of its strongest performances this quarter. The surge came amid expectations that the Federal Reserve would maintain a neutral stance on interest rates.
Bitcoin’s upward movement signaled investor optimism, driven by growing institutional adoption and capital rotation from traditional assets. However, the bullish momentum was short-lived, with BTC falling back to $115,800 shortly after Powell’s comments during the Fed’s press briefing.
Powell Cautions on Tariffs and Inflation Risks
Federal Reserve Chair Jerome Powell confirmed that the central bank would keep rates steady, but warned about growing inflationary risks from the current U.S. tariff policy.
“Tariffs are pushing prices higher,” Powell stated, suggesting that the Fed may need to take action if inflation expectations continue to rise.
This tone rattled both crypto and equity markets, reversing earlier gains and reminding investors that the Fed remains highly vigilant on inflation pressures, despite recent improvements in core inflation data.
Crypto Market Reacts to Policy Signals
Bitcoin’s near 2% dip immediately followed Powell’s hawkish comments, showing just how sensitive digital asset markets remain to central bank policy. Other cryptocurrencies also faced moderate selling pressure, though volatility remained relatively contained.
While long-term sentiment remains bullish, traders are closely monitoring macroeconomic signals, particularly related to monetary tightening, which has historically weighed on risk assets like cryptocurrencies.
BTC Still in Uptrend, but Caution Rises
Despite the short-term decline, Bitcoin remains in a strong technical uptrend, with support levels around $114,000 and resistance near $119,000.
Hawkish tones from the Fed could lead to increased short-term volatility, but overall demand for Bitcoin as a hedge remains elevated. As inflation expectations evolve, digital assets could continue to play a strategic role in diversified portfolios.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.