Bitcoin Price Stabilisation Amid Fed Tension and Stagflation Concerns

Bitcoin (BTC) stabilised near $85,000 as tensions escalated between President Trump and Fed Chair Powell, exacerbating fears of stagflation. Despite market fluctuations, bullish betting on Bitcoin at $90,000 – $100,000 persists alongside protective strategies against declines. Economic indicators signal instability, with the Philadelphia Fed manufacturing index dropping to a two-year low, further complicating the outlook for investors and markets.

Bitcoin (BTC) remains stable just below $85,000 amid heightened tensions between U.S. President Donald Trump and Federal Reserve Chair Jerome Powell. The recent decline in the Philadelphia Fed’s manufacturing index, coupled with rising prices, has intensified fears of U.S. stagflation, further complicating investor sentiment.

Despite market instability, the CoinDesk 20 Index showed gains led by Bitcoin Cash (BCH), NEAR, and AAVE. Traders are taking bullish stances, betting on a potential surge to $90,000 – $100,000 while also considering protective measures against possible declines.

Recent communications from Powell indicate a strict focus on price stabilization, hinting at tighter Fed policies, which contradict Trump’s favour for more lenient economic measures. Trump’s discontent with Powell is notable, as discussions of his potential termination, already circulating for months, raise concerns about the independence of the central bank.

Analysts suggest that removing Powell could potentially destabilise already volatile U.S. markets, as both former Fed Governor Kevin Warsh and Treasury Secretary Scott Bessent have cautioned against such political interference.

The prediction market Polymarket reflects increased odds (19%) of Trump dismissing Powell, marking the highest probability since January. This uncertainty follows the European Central Bank’s warning on deteriorating growth and the lowest Philadelphia Fed index reading in two years, signalling troubling economic conditions.

In crypto markets, Bitcoin and Ethereum (ETH) experienced a slight uptick of 0.8% over 24 hours. The mixed market dynamics show traders pursuing bullish options while simultaneously investing in put options at $80,000, effectively hedging against potential market downturns. The VIX remains elevated, signalling continued market apprehension and underlying volatility amid unstable macroeconomic circumstances.

Traders on Deribit are looking for further bullish opportunities while simultaneously securing themselves against possible declines. This dual strategy highlights a cautious yet opportunistic approach amidst a fluctuating market environment. Key figures include reporters Krisztian Sandor and Helene Braun, who contribute insights into market developments and crypto trends.