Bitcoin Tumbles 5% to $99K as Fed Chair Powell Signals Less Dovish Policy in 2025

The altcoin market performed worse, with XRP, Cardano's ADA, and Litecoin's LTC down 10% before recovering from their lows.

Bitcoin price dropped from $104,000 after the announcement, reaching $99.1K following the speech by the Fed Chair on Thursday, showing a decrease of almost 5% in the past 24 hours.

The altcoin market showed worse performance, with XRP, Cardano’s ADA, and Litecoin’s LTC dropping by 10% before recovering from their lows.

Data from Coinglass showed 278,901 traders were liquidated for the day, with total liquidations amounting to $809 million. The largest single liquidation order was on Binance – ETHUSDT, valued at $7.1 million.

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Recent data, which showed persistently strong economic growth and sticky inflation, had shifted the focus today to the Fed’s future policy decisions, including the statement, revised economic forecasts, and the upcoming press conference by Chairman Jerome Powell.

A sustained increase in the value of the US dollar also presents a macro risk to Bitcoin because it is linked to a reduction in the world’s money supply, which is usually bad for Bitcoin and other cryptocurrency assets.

Bitcoin’s greatest risk is a strong dollar and tightening liquidity. But the theory of a high BTC supply deficit is supported by the fact that on-chain metrics for the cryptocurrency are still very bullish, especially the continuing decline in exchange balances.

According to the Fed’s quarterly economic projections, which include a “dot plot” showing the central bank’s expectations for the trajectory of the Fed funds rate, policymakers expect the rate to fall to 3 percent by the end of 2025 or for an additional 50 basis points in rate cuts next year.

Crypto Market Headwinds in Future Despite Trump Effect

Arthur Hayes, the co-founder and former CEO of cryptocurrency exchange BitMEX, believes that the current bullish trends in the cryptocurrency market, sparked by Donald Trump’s recent victory in the presidential election, may be short-lived.

When crypto traders realize this around January 20, 2026, the market could face a “terrifying sell-off,” as described by Hayes. “Once they realize that Trump has at most one year to implement any policy changes starting from January 20, the market will experience a severe sell-off, not just in crypto but also in other Trump 2.0 stock trades. Buyers will experience a lot of pain.”