Bitcoin Drops As Fed Pause And Powell Uncertainty Shake Markets

Bitcoin fell sharply after the Federal Reserve kept interest rates unchanged, while fresh uncertainty around the central bank’s leadership added more pressure to crypto markets.

The world’s largest cryptocurrency briefly slipped below $75,000 after the Fed’s latest policy decision, before recovering part of the losses later in the session. The move showed how sensitive crypto markets remain to interest rate expectations and wider macroeconomic signals.

The Federal Open Market Committee voted to keep the benchmark interest rate at 3.5% to 3.75%, extending its current pause in monetary policy. While the decision itself was largely expected, the market reaction was still sharp. Bitcoin dropped from around $76,200 to just under $75,000 within minutes of the announcement.

The volatility also led to a wave of liquidations across the crypto market. According to CoinGlass data mentioned in the original report, around $528 million in positions were liquidated over 24 hours. Long positions accounted for the larger share, showing that many traders were caught off guard by the sudden move lower.

Market attention quickly shifted from the rate decision itself to what the Fed may do next. The vote showed a rare split among policymakers, with several members disagreeing with the decision to keep rates unchanged. This raised fresh questions about the direction of U.S. monetary policy heading into the second half of 2026.

For crypto traders, the disagreement matters because Bitcoin often reacts strongly to changes in liquidity expectations. Higher rates can reduce appetite for risk assets, while signs of future rate cuts can support more speculative markets. In this case, the mixed signals from the Fed made the outlook less clear.

The situation became more complicated after Jerome Powell confirmed that he plans to continue serving as a Federal Reserve Governor after May 15. Powell said he would leave at the appropriate time, while also pointing to concerns about legal pressure on the institution.

His comments came at a politically sensitive moment. The Trump administration has repeatedly criticised Powell over interest rate policy, and the latest statement added another layer of uncertainty for investors already watching the Fed closely.

At the same time, Kevin Warsh moved closer to becoming the next Fed chair after the Senate Banking Committee advanced his nomination. The nomination now heads to the full Senate, with a confirmation vote expected in the week of May 11.

Warsh is seen as more open to rate cuts, which could become an important factor for markets if he is confirmed. He has also disclosed investments in several crypto-related companies and tokens, including dYdX, Polychain, Dapper Labs, Solana and Optimism.

Bitcoin’s reaction highlights how quickly sentiment can change when monetary policy signals become harder to read. The Fed kept rates unchanged, but the internal disagreement, Powell’s position and Warsh’s possible confirmation all created a more uncertain backdrop.

For the crypto market, the main issue is no longer only whether rates stay unchanged today, but how the Fed’s policy path may shift in the coming months. As long as uncertainty around rate cuts and Fed leadership remains high, Bitcoin could continue to see sharp short-term moves.