7.6 Million BTC: An Insurmountable Hurdle? Powell's Hawkish Stance Shatters Bulls' Dreams

Written by: Mahe, Foresight News

On March 19th early morning, the Federal Reserve announced its latest interest rate decision, holding steady for the second consecutive meeting. The latest interest rate and economic forecasts show that policymakers still expect a rate cut this year, with inflation projected to be 2.2% by the end of 2027.

Expected rate cuts for the year have decreased to 16 basis points

Since March 9th, Bitcoin has experienced a rare 8-day consecutive rally, reaching $76,000, but has since corrected for several days, hovering around $71,000, with a low of $70,500. ETH has pulled back from around $2,400 to $2,200. Altcoins are broadly declining.

Regarding futures liquidation data, according to coinglass, in the past 24 hours, the total open interest liquidations across the network amounted to $458 million, with long positions liquidated at $385 million.

At the close, the Dow Jones Industrial Average fell 768.11 points, down 1.63%, closing at 46,225.15 points, hitting a new low for the year. The Nasdaq Composite dropped 1.46%, closing at 22,152.42 points. The S&P 500 declined 1.36%, ending at 6,624.70 points. So far this month, the Dow has fallen over 5%, possibly marking the worst month since 2022.

The possibility of rate hikes is back in discussion

February’s PPI data far exceeded expectations, inflation pressures intensified, and the Fed’s hawkish signals significantly reduced expectations for rate cuts this year. Crude oil prices surged, US stocks and bonds declined together, and the dollar rebounded above 100.

According to the latest Polymarket data, the market currently prices in a 27% chance that the Fed will hold rates steady this year, up 4%. The probability of a 25 basis point rate cut once this year is 33%, while the chance of two cuts totaling 50 basis points has decreased to 20%.

Powell explicitly stated that he would not consider rate cuts until further inflation improvement is observed. Meanwhile, the committee has begun discussing the possibility of future rate hikes, although this is not the baseline scenario for most officials. Powell noted that the cooling process of inflation has slowed significantly, with short-term inflation expectations rising again in recent weeks. Price pressures from tariffs are still transmitting to core inflation, and rising oil prices due to Middle East tensions add new upside risks. A significant decline in commodity inflation may not occur until at least mid-year.

Powell acknowledged that employment growth is at a relatively low level, and with labor supply slowing, the “balance” of the job market is inherently fragile. Additionally, energy shocks not only push prices higher but may also negatively impact employment and overall economic activity by suppressing consumption, squeezing corporate costs, and disrupting supply chains.

Market fears of oil supply disruptions have intensified after attacks on energy facilities related to the Iran conflict, with the Strait of Hormuz facing the threat of blockade. Crude oil prices briefly surged past $107. Powell emphasized that it’s still uncertain how long these shocks will last and how severe their impact will be, but the potential impact on the US and global economy should not be underestimated.

Corpay’s Chief Market Strategist, Carl Shmota, said: “The Fed maintaining rates and only making minor adjustments to its policy statement indicates that officials plan to follow long-term monetary policy practices and are adopting a ‘wait-and-see’ attitude toward the ongoing global energy price shocks.”

Savvy Wealth’s Chief Investment Officer, Anshul Sharma, stated: “I believe we are in a high-volatility cycle. If oil prices stay high… we know this will transmit throughout the economy. Continued energy shocks will push inflation higher while growth begins to slow, creating a ‘dangerous combination.’ This will make it more difficult for the Fed to balance its dual mandate.”

Fed Chair Will Not Leave During Investigation

Powell said at the meeting that he will not leave the Fed during the investigation and will continue to serve as “acting chair” if necessary. He stated that there are no plans to resign until the investigation is complete, transparent, and the conclusions are clear. If the chair’s term ends before a successor is confirmed, he will serve as acting chair in accordance with legal provisions until a new chair is officially appointed, ensuring the Fed’s operations and independence are not politicized.

Powell is currently serving as Fed Chair, with his term ending on May 15, 2026. The Trump administration announced in late January that Kevin W. Woeh, a former Fed governor who resigned in 2011 over opposition to quantitative easing, was nominated to succeed him. This choice is seen as more hawkish and aligned with White House rate preferences.

However, the confirmation process in the Senate has stalled—North Carolina Republican Senator Tom Tillis explicitly stated he would not advance Woeh’s nomination until the judicial investigation into Powell is fully resolved. This has directly linked the leadership transition at the Fed to the investigation’s outcome.

Currently, Polymarket’s latest data shows only a 2% market probability of Powell leaving in May.

Crypto Market Outlook

With the Fed’s rate hike expectations diminished and market liquidity under pressure, what will be the next move for the crypto market?

Wintermute published an article stating that the early bear market sell-off pressure seems to have passed, but confirmation signals are needed before officially declaring a new phase. The current market structure is more optimistic than in recent months. The reset of Coinbase premiums, ETF fund inflows, and institutional trading flows all point in the same direction. The $60,000 level appears to have attracted genuine institutional buying support, which is a very important prerequisite.

Wintermute noted that for Bitcoin, the key resistance levels are $74,000 and $80,000. It’s also worth remembering the cycle analogy: historically, from peak to trough, it takes about 400 days, and we are less than 200 days into this bear market. Due to structural factors—including the adoption of stablecoins and RWA, the maturity of institutional infrastructure, and the absence of fundamental disruptions—this bear market may be shallower than previous cycles, but that does not mean we should have unrealistic expectations for a rapid recovery.

Glassnode tweeted this week that Bitcoin’s price briefly broke above $74,000, with short-term holders realizing profits that surged to $18.4 million per hour. This pattern is consistent with observations from February: short-term holders continue to absorb upward momentum at the $70,000 level, dampening any real breakout before a sustained rally can form.