Bitcoin Nears $100K Amid Trump's FED Impact and Market Volatility

Bitcoin (BTC) surged to nearly $100,000 at the start of 2026, marking a 10% increase from its December lows. However, the price remains below its October peak of $126,000. This rally coincided with speculation about a potential 2026 Federal Reserve rate cut.

Market dynamics shifted as U.S. President Donald Trump revealed that Kevin Hassett, a dovish economic adviser, is unlikely to be named the next Federal Reserve chair. This news created uncertainty in the market and potentially curtailed expectations of a Fed rate cut. Analysts see Hassett as a potential catalyst for a bullish crypto market.

The impact of Trump's remarks was immediate. The likelihood of Hassett becoming Fed Chair dropped significantly in prediction markets, while his rival Kevin Warsh gained traction with a 60% probability. Warsh is viewed as a more hawkish candidate, which could prolong high interest rates and create short-term pressure on crypto assets.

A significant development emerged when a long-dormant Bitcoin whale began selling holdings. The wallet, tagged as '5K BTC OG', has already offloaded 2,500 BTC in multiple transactions. The latest dump saw an additional 500 BTC moved to Binance, valued at $47.77 million. This whale still holds 2,500 BTC worth $237.5 million.

Why Did This Happen?

The Bitcoin price surge at the start of 2026 was driven by several factors. Market participants anticipated a 2026 Fed rate cut, which would likely boost risky assets like Bitcoin. However, Trump's comments on the FED chair selection altered expectations. Investors are now re-pricing the probability of a dovish Fed, leading to a shift in market sentiment.

The whale's selling activity suggests a strategic move to avoid market volatility. By gradually offloading holdings, the seller aims to blend into liquidity zones and minimize market impact. This behavior could influence the broader market, especially as Bitcoin approaches $100,000.

How Did Markets React?

Bitcoin's price movement has significant implications for the market. As it tested key levels like the 200-day moving average, traders remained cautious. The failure to break above $94,500 resistance shifted momentum to the downside. This technical development, combined with macroeconomic uncertainty, increases the risk of a price correction.

Political tensions between Trump and Federal Reserve Chair Jerome Powell have also contributed to market uncertainty. A criminal investigation involving Powell has raised concerns about the independence of U.S. monetary policy. This uncertainty could drive volatility across risk assets.

What Are Analysts Watching Next?

Analysts are closely monitoring the impact of Trump's statements on the FED chair selection. The shift from a dovish to a hawkish Fed could influence the broader financial landscape. Kevin Warsh's potential appointment could prolong high interest rates, which may weigh on Bitcoin's price in the short term.

The selling activity by the 5K BTC OG wallet is another key focus. If the whale continues offloading holdings, it could push the price down further, especially in the $80,000 support zone. Investors are watching for signs of further liquidation and how the market absorbs these large volumes.

Morgan Stanley's recent filing for Bitcoin and Solana ETFs signals growing institutional interest. This development could attract more capital into the crypto market, potentially supporting Bitcoin's price. However, the firm's CEO emphasized a cautious approach to potential acquisitions and prioritizes returning excess capital to shareholders.

Public finance innovations in the U.S. are also drawing attention. States like Texas and New Hampshire are experimenting with Bitcoin for public balance sheets and municipal bonds. Texas has invested in ETFs as a safer way to hold Bitcoin, while New Hampshire plans a $100 million Bitcoin-backed municipal bond issue.

The market remains in a delicate balance as these factors converge. Investors are advised to monitor macroeconomic developments, political dynamics, and large holder activity. The coming weeks will be crucial in determining Bitcoin's next move and the broader crypto market's direction.