Bitcoin Rises as Trump Questions Fed Chair Powell’s Role

Bitcoin is showing signs of a potential bullish surge as political tensions escalate between President Donald Trump and Federal Reserve Chair Jerome Powell. The cryptocurrency, often viewed as a hedge against economic uncertainty, is forming a bullish pennant pattern, signaling a possible upward breakout. This development comes as Trump openly considers replacing Powell, despite lacking the legal authority to do so, raising questions about the Federal Reserve’s independence and its implications for financial markets.

At last check on Saturday, Bitcoin was trading at $85,232.30, hovering between support at $84,000 and resistance at $85,000. This represents a 14% increase from its monthly low, reflecting growing investor interest. Market analysts suggest that if Trump’s rhetoric leads markets to anticipate lower interest rates, the U.S. dollar could weaken, driving demand for alternative assets like Bitcoin. Lower interest rates typically reduce the appeal of traditional investments, making cryptocurrencies more attractive to investors seeking higher returns.

Fed Independence Under Scrutiny

The U.S. Federal Reserve Act explicitly prevents the president from dismissing the Fed chair, ensuring the institution’s independence from political pressures. This structure allows the Fed to prioritize long-term economic stability over short-term political demands. However, Trump’s administration has a history of challenging established norms, from defying court rulings on immigration to targeting media outlets critical of the White House. This pattern has fueled speculation about whether Trump could attempt to influence or oust Powell.

Kevin Hassett, director of the National Economic Council, recently confirmed that Trump is exploring his authority to fire Powell. The president’s frustration stems from Powell’s refusal to lower interest rates swiftly. Trump has publicly criticized Powell, stating he believes a different Fed chair would reduce rates to stimulate the economy. In contrast, Powell and other Fed officials, including Mary Daly, have emphasized a cautious approach, monitoring the inflationary impact of Trump’s tariffs before making rate decisions. Daly noted that persistent high inflation could delay anticipated rate cuts, further complicating the economic outlook.

The standoff between Trump and Powell introduces uncertainty into financial markets, which could benefit Bitcoin as investors seek refuge in decentralized assets. While the Fed’s independence is legally protected, Trump’s persistent challenges to institutional norms may continue to influence market sentiment. For now, Bitcoin’s technical patterns and the broader economic context suggest it could be poised for significant movement, with investors closely watching both political developments and the cryptocurrency’s price action.