Bitcoin’s recent calm gave way to fresh pressure, as uncertainty returned to global markets. As traders reassessed risk following renewed discussion around U.S. monetary policy leadership, the world’s largest cryptocurrency slipped to its lowest level in two months, setting the tone for a broader pullback across the crypto market.. As confidence weakened, selling pressure spread across the crypto market, pulling prices lower and reinforcing a cautious mood among traders.
The sell-off was triggered in part by growing speculation that former Federal Reserve Governor Kevin Warsh could be named the next Fed chair, replacing Jerome Powell. Warsh is seen by many investors as a figure who might tighten monetary policy and reduce liquidity in financial markets. Since Bitcoin and other cryptocurrencies have historically benefited from loose money and abundant liquidity, markets reacted nervously to the prospect of a shift in U.S. monetary stance.
As traders digested the possibility of tighter conditions, risk assets like Bitcoin came under pressure. The benchmark digital asset has lost roughly a third of its value since reaching record highs last October. Friday’s declines marked the fourth straight month of losses , the longest consecutive losing streak for Bitcoin in nearly a decade.
Ethereum and other major tokens were also caught in the downturn. Ether slid to a two-month low, reflecting broad risk aversion across the crypto market. Traders pointed to a mix of macroeconomic uncertainty, profit-taking and shifts toward safe-haven assets like gold as contributing to the broader weakness.
Market participants have pointed to several forces at work. In addition to Fed leadership speculation, weakness in major tech stocks ,including a significant drop in shares of a large AI-focused technology company ,helped dampen investor optimism. Some analysts also noted that concerns about slowing AI-driven growth, combined with tightening liquidity expectations, have reduced appetite for volatile assets.
Despite the short-term pain, some investors see the downturn as a potential opportunity. Historically, prolonged dips have sometimes set the stage for accumulation by long-term holders and institutions. However, in the near term, market watchers say that Bitcoin’s trajectory will remain closely tied to developments in U.S. monetary policy and broader risk sentiment.
As global markets brace for the formal Fed chair nomination and evolving policy direction, traders in both traditional finance and crypto will be watching Federal Reserve signals closely for clues about liquidity, interest rates and risk-asset pricing , all key drivers of future Bitcoin performance.
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