Bitcoin surges as Trump ramps up pressure on Jerome Powell
Recent economic data has done little to reassure markets. The Philadelphia Fed’s manufacturing index fell to a two-year low.
Quick overview
- Bitcoin is in a critical consolidation phase, with potential breakouts determining its short-term direction amid macroeconomic uncertainty.
- Cryptocurrencies are experiencing a positive start to the week, with Bitcoin gaining 3% and Ethereum rising 2.5%.
- The weakening U.S. dollar is boosting demand for alternative assets like gold and cryptocurrencies, with gold recently hitting an all-time high.
- Tensions surrounding former President Trump's potential move to oust Fed Chair Jerome Powell are adding volatility to the economic landscape.
Live BTC/USD Chart
Bitcoin is currently in a critical consolidation phase, where any breakout above resistance or drop below support levels could determine its short-term direction—against the backdrop of ongoing macroeconomic uncertainty.
Cryptocurrencies are starting the week on a positive note, buoyed by rising political tensions and growing signs of economic instability. Bitcoin (BTC) is leading the rally with a 3% gain, trading near $87,400 on Binance. Ethereum (ETH) is also climbing, up 2.5%, comfortably holding above the $1,600 mark.
The upbeat sentiment is spreading across the altcoin market as well. Projects like Solana (SOL) and Tron (TRX) are posting gains close to 1%, while others such as Cardano (ADA), Dogecoin (DOGE), Chainlink (LINK), and Avalanche (AVAX) are seeing even stronger momentum, with some rising over 2%.
This renewed appetite for risk is unfolding alongside a weakening U.S. dollar. The DXY index, which tracks the dollar’s performance against a basket of foreign currencies, has dropped to levels not seen since early 2022, posting a 10% decline over the past three months.
This pullback typically results in looser financial conditions, boosting demand for alternative assets like gold and cryptocurrencies. It’s no coincidence that gold has just hit another all-time high, surpassing $3,400 per ounce.
According to The Kobeissi Letter, gold and Bitcoin appear to be moving in tandem for the first time in years. “Both assets are responding to the growing weakness of the dollar, reflecting a broader climate of economic uncertainty,” they noted on social media platform X.
Trump-Powell Tensions Stir Volatility
Amid this volatile backdrop, renewed speculation is swirling around former President Donald Trump’s potential attempt—now back on the campaign trail—to remove Jerome Powell as Chair of the Federal Reserve. According to The Wall Street Journal, Trump has consulted advisers about the legal feasibility of ousting Powell and replacing him with someone more aligned with his economic vision, such as former Fed Governor Kevin Warsh.
Trump’s relationship with Powell has long been strained, marked by frequent public criticisms over interest rate policy. On his platform, Truth Social, Trump didn’t hold back: “Powell, also known as ‘Too Late,’ has once again failed. With inflation falling and the U.S. benefiting from tariffs, he should have already cut rates, like the ECB did.”
Fed Pushes Back Amid Rising Economic Concerns
The Fed responded swiftly. Powell reaffirmed the central bank’s independence from political pressure, while Austan Goolsbee, President of the Chicago Fed, warned that any attempt to remove Powell would deal a serious blow to the institution’s credibility.
Compounding the tension, recent economic data has done little to reassure markets. The Philadelphia Fed’s manufacturing index fell to a two-year low, while producer prices rose—stoking fears of potential stagflation fueled by the administration’s protectionist policies.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals