Bitcoin Climbs as Fed Independence Concerns Fuel Safe-Haven Bid

Key Moments

Market Snapshot: Broad Crypto Gains Late Sunday

Bitcoin and other large-cap cryptocurrencies strengthened late Sunday as investors assessed macroeconomic dynamics following a warning from Federal Reserve Chair Jerome Powell about political pressure on the central bank.

As of 11:30 p.m. ET Sunday, bitcoin traded at $92,047, up 1.5%, according to The Block’s price page. Ethereum added 1.99% to reach $3,157, while Solana outperformed major alternative cryptocurrencies with a 4.81% increase to $142.53.

Privacy Tokens Outperform in Risk-Repricing Move

Gains extended across the broader digital asset complex, with privacy-oriented coins standing out. Monero rallied 17.9% to $574.09, and Zcash advanced 9.76% to $410.92, making them some of the strongest performers in the session.

Powell-DOJ Clash and Fed Independence Concerns

The market reaction followed a video message from Powell, in which he said the U.S. Department of Justice had threatened to bring criminal charges tied to his testimony before Congress in June 2025.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” said Powell, whose term as Fed chair is scheduled to end in May 2026.

U.S. President Donald Trump has consistently criticized Powell over the trajectory and scale of interest rate reductions. Trump has urged the Federal Reserve to pursue more aggressive and faster cuts, advocating for a policy rate of 1% or below.

Safe-Haven Rotation: Bitcoin and Gold Move Together

Peter Chung, head of research at Presto Research, linked the timing of the crypto move to Powell’s video release.

Chung said bitcoin’s advance “started right around the time Jerome Powell’s video was released,” and pointed out that gold spiked at the same time. Spot gold was up 1.3% to $4,569 at the time of writing.

“These price actions strongly suggest that Powell’s remark that the Fed’s independence is under threat have triggered investor concerns over the USD-led legacy financial system,” Chung said, noting that confidence in the dollar’s neutrality is central to its reserve-currency status. “Once the public sufficiently believes this is no longer the case, investors will start to look for hedges against the legacy system, and gold and BTC are those hedges.”

Technical Factors and Regulatory Watch

Vincent Liu, CIO of Kronos Research, highlighted market structure and positioning as additional drivers behind the move.

“BTC and ETH climbed on technical support and strategic buying at key levels,” Liu said. “Traders are eyeing these moves amid updates on the broader regulatory chatter, including news on the potential digital-asset market-structure bill to boost transparency and liquidity.”

Liu said traders are monitoring three primary catalysts this week: Powell’s confrontation with the DOJ, developments on tax-cut proposals, and Tuesday’s upcoming U.S. Consumer Price Index release.

Macro Backdrop and Political Tensions

Jeff Mei, COO at BTSE, warned that volatility could pick up around the U.S. market open due to the heightened political backdrop. “Because of the Trump-Fed spat, it’s possible that the market may dip upon its open U.S. time,” he said.

By contrast, Jeff Ko, chief analyst at CoinEx Research, argued that the DOJ-Fed dispute is better viewed within a broader story of policy unpredictability rather than as a standalone driver. Ko said the overall macro environment remains favorable for digital assets, citing softer-than-expected non-farm payrolls, firmer gold prices, and a recent deleveraging reset.

Ko also flagged geopolitical tensions as an ongoing concern. “Any escalation could significantly amplify market volatility and safe-haven flows,” he added.

Supportive U.S. Fundamentals and Rate Expectations

Andri Fauzan Adziima, research lead at Bitrue, attributed part of the crypto resilience to underlying U.S. economic strength, pointing to robust GDP expansion, improving real wages, and moderating inflation as conditions that tend to support risk-sensitive assets.

His comments came alongside a change in interest rate expectations referenced from Reuters, with Goldman Sachs shifting its projected timing for Federal Reserve rate cuts to June and September 2026, from an earlier view of March and June 2026.

“Anticipated Federal Reserve rate reductions, most likely in June and September, will further ease financial conditions, injecting liquidity that cryptocurrencies historically absorb with vigor and signaling the early stages of a sustained bullish phase,” Adziima added.

Disclosure

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