Bitcoin prices spiked during Asian trading hours as of Monday following comments from Federal Reserve Chair Jerome Powell regarding Department of Justice subpoenas.
Powell commented that the subpoenas are related to comments the Federal Reserve chair made during a Senate Banking Committee last June regarding ongoing renovations of Federal Reserve buildings. Following the comments, bitcoin rallied alongside gold and silver as the US dollar sold off.
Market participants interpreted the legal action as retaliation for the central bank’s refusal to align policy with President Donald Trump’s preferred interest rate path. QCP noted that while immediate economic implications may be limited, the perception of political interference poses a risk to institutional credibility. Historical data suggests such narratives typically prompt capital rotation into alternative value stores.
Gold and silver maintained their roles as default hedges against institutional instability. Bitcoin participated in the initial rally but failed to sustain a close above the $92,000 level, with the cryptocurrency retraced sharply at the European open.
The trading firm observed that this price action echoes a pattern seen throughout much of the fourth quarter of last year. QCP stated that the inability to capitalize on bullish narratives underscores structural headwinds Bitcoin has faced since October 10. Optimism regarding a first-quarter breakout appears to be fading.
Derivatives markets reflected this shift in sentiment through adjustments in long-dated exposure. Traders reduced positions in January 30 calls at $98,000 and February 27 calls at $100,000. Some investors rolled January 30 contracts into March 27 calls with a strike price of $125,000.
QCP suggested this activity indicates a push-out of bullish expectations rather than conviction in a near-term rally. Selling pressure during US trading hours remains a persistent feature for the asset class.
