Trump-Powell Conflict Causes Market Instability as Retail Investors Sell Bitcoin at a Loss

Bitcoin has recently experienced increased volatility due to a rare and pointed response from Federal Reserve Chair Jerome Powell, following news of a criminal investigation regarding his actions. This situation led to a drop in Bitcoin's price, highlighting the interplay between political pressures, macroeconomic policies, and investor sentiment. Additionally, retail investors are selling their holdings at a loss, reflecting their fears despite a broader upward trend in Bitcoin’s value.

Key Takeaways

Jerome Powell publicly addressed a criminal investigation, causing Bitcoin's price to drop.
Bitcoin fell from around $92,500 to near $90,500 amid market uncertainty.
Retail investors are showing signs of fear and have been selling at a loss, despite Bitcoin's overall upward structure in 2024 and 2025.
Consolidation trends indicate that Bitcoin remains under the influence of macroeconomic factors and investor psychology.
The market is currently in a phase of reduced trading volume, potentially signaling an upcoming increase in volatility.

Trump-Powell Conflict Fuels Volatility While Retail Sells Bitcoin At A Loss – Details

Bitcoin Faces New Volatility Amid President and Fed Tensions

Bitcoin has entered a new phase of volatility following an unusual and direct statement from Jerome Powell, the Chair of the Federal Reserve. This came after reports surfaced about a criminal investigation into Powell's conduct as Fed Chair. In his statement, Powell remarked, “The threat of criminal charges is a consequence of the Fed setting rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”

The market's reaction was swift, with Bitcoin's price dropping from approximately $92,500 to nearly $90,500. This decline reflects heightened uncertainty as traders reassess the political and macroeconomic environment. Notably, this shift interrupted a previous consolidation period, reintroducing volatility just as Bitcoin attempted to establish support above the $90,000 level.

What makes this event particularly significant is the change in Powell's public approach. Over the past year, he usually refrained from engaging with President Trump’s criticisms, often replying with variations of "I have no response or comment." However, this time, his silence has been broken.

As the market digests these implications, Bitcoin finds itself at the crossroads of macroeconomic policy, political dynamics, and investor psychology. The upcoming responses from policymakers and the market may crucially affect Bitcoin’s short-term price direction.

Retail Sentiment Worsens as Short-Term Holders Experience Losses

Recent analysis from CryptoQuant reveals that retail investors remain anxious about short-term price fluctuations, even though Bitcoin is following a broader upward trend. The Short-Term Holder SOPR (STH SOPR) indicates a consistent behavioral trend during corrective phases, often seen in larger bull trends.

Bitcoin SOPR Short-Term Holder | Source: CryptoQuant

Despite Bitcoin achieving higher highs and lows throughout 2024 and 2025, short-term investors have been realizing losses continuously. Last year, retail sentiment sharply declined, with the STH SOPR dropping to about 0.98—the lowest since November 2022, when Bitcoin traded near $16,000. Although the indicator hasn't fallen into extreme capitulation below 0.98, it has lingered beneath the neutral level of 1.00 for more than 70 days, indicating sustained selling at a loss.

This trend means that while the STH SOPR remains below 1.00, markets are likely to see extended consolidations or corrections, spurred by increased fear and realized losses. Interestingly, such conditions historically mark favorable accumulation zones during uptrends. This discrepancy between rising prices and retail behavior often signals potential opportunities rather than weakness, illustrating Bitcoin's structural strength despite short-term volatility.

Bitcoin Struggles Below Key Resistance Amid Consolidation

Bitcoin’s weekly chart reveals the market is currently in consolidation following a sharp decline from the October highs near $120,000. After Bitcoin fell below the crucial psychological level of $100,000, it found buying interest in the low-$80,000 range before climbing towards the $90,000–$94,000 area, where its price is now stalling. This range has become a short-term equilibrium, with buyers maintaining higher lows yet unable to create sufficient momentum for a breakout.

BTC consolidates in a tight weekly range | Source: BTCUSDT chart on TradingView

From a trend analysis viewpoint, Bitcoin is currently trading below the 50-week moving average, which serves as dynamic resistance around the mid-$90,000 range. Conversely, the 100-week moving average is on an upward trend well below the current price, reinforcing the notion that the broader macro trend remains intact, despite recent price weaknesses. The 200-week moving average, much lower down, continues to define the long-term bullish market structure.

Trading volume has notably decreased during this consolidation period, indicating reduced market engagement and uncertainty. Such a decline typically precedes an expansion in volatility rather than a continuation of slow, sideways movements.

As long as Bitcoin remains above the rising 100-week moving average, any downward movements appear structurally limited. However, failure to reclaim the $94,000 resistance zone may leave the market susceptible to further consolidation before a lasting trend can resume.

Featured image from ChatGPT, chart from TradingView.com