Bitcoin, Ethereum Hold Steady as XRP Slides Amid DOJ Criminal Investigation Into Fed Chair Powell

Bitcoin and Ethereum held firm in early trading on Monday, as the U.S. Department of Justice launched a criminal investigation into Federal Reserve Chair Jerome Powell. The investigation, which focuses on Powell's June 2025 testimony regarding the Fed's headquarters renovation, has sparked renewed market speculation about the central bank's independence.

The Fed confirmed the investigation in a statement, with Powell arguing that the inquiry was politically motivated and aimed at influencing monetary policy. In response, Bitcoin rose above $90,000, while Ethereum traded within a narrow range.

Altcoin XRP, however, declined by more than 1% amid heightened volatility. Ripple's token faced declining retail demand and liquidity in the derivatives market, suggesting broader uncertainty among traders.

Why the Move Happened

The DOJ's criminal investigation centers on Powell's testimony before Congress about the renovation costs of the Fed's headquarters. Powell has stated that the investigation reflects an effort by the Trump administration to pressure the Fed into lowering interest rates.

The move follows months of speculation and growing tension between the administration and the Fed. In recent weeks, the Fed has resisted calls for larger interest rate cuts, citing inflation concerns and broader economic stability.

How Markets Responded

Bitcoin's price surged after the announcement, reaching an intraday high of $92,519, while Ethereum held steady near $3,100. Market analysts suggest that the Fed's independence and policy direction are key factors influencing investor sentiment.

Meanwhile, XRP's decline reflects a broader shift in risk appetite. With futures open interest declining to $4 billion, traders are scaling back exposure to the token, indicating a lack of confidence in its immediate price outlook.

What Analysts Are Watching

Market observers are closely monitoring the DOJ's investigation for any developments that could affect U.S. interest rate policy. If the probe escalates, it could further erode confidence in the central bank's independence, potentially altering the trajectory of monetary policy.

In the cryptocurrency markets, analysts are watching for signs that capital is shifting from Bitcoin to higher-risk altcoins. A recent $23 million XRP trade in 60 seconds has sparked speculation about whether altcoin season is beginning in 2026.

Bitcoin's 50-day EMA remains a key technical level, with traders watching for a potential break above $91,555 to confirm a bullish trend. If the price fails to hold above $90,000, it could trigger further declines.