Bitcoin slips below $71,000 as Powell cites oil-led inflation risk
Bitcoin fell below $71,000 after Fed Chair Jerome Powell said rising oil prices tied to the Iran conflict are already worsening the inflation outlook. The Federal Reserve kept rates steady, but Powell warned that policymakers “for sure” see oil shock effects in higher 2026 inflation projections. The forecast rose to 2.7% from 2.4%.
Powell pushed back on 1970s-style stagflation comparisons, arguing unemployment is near long-run norms and inflation is only modestly above target. Still, markets reacted by pushing back rate-cut expectations.
Crypto and risk assets declined together. Bitcoin traded around $70,900, down nearly 5% over 24 hours, while Ether slid about 6.5%. U.S. equities also closed at the session lows: the S&P 500 fell 1.4% and the Nasdaq dropped 1.5%. Gold extended its decline to below $4,850.
Bitcoin’s move suggests traders are re-pricing the macro path toward fewer or later cuts, with energy-driven inflation concerns acting as a near-term headwind for liquidity-sensitive assets. The selloff in crypto-related stocks (including exchange and treasury-linked names) signals broad risk-off positioning rather than a single-coin issue.
Bearish
Bearish. Powell’s message links the Iran-related oil shock to higher inflation projections, pushing traders to price a slower or less certain rate-cut path. That typically pressures BTC via higher real-rate expectations and reduced liquidity.
In the short term, the article shows a clear risk-off tape: Bitcoin breaks below the $71,000 level while both tech equities (Nasdaq/S&P 500) and gold weaken. When crypto trades alongside broader risk assets and macro rates repricing, downside follow-through is more likely than isolated dip-buying.
In the longer term, if energy-driven inflation persists, it can keep policy restrictive for longer and reduce the probability of a durable liquidity tailwind for Bitcoin. This resembles past episodes where inflation surprises or commodity-driven price shocks led to “cuts get delayed” narratives, often capping rallies until markets re-stabilize.
Key trader takeaway: watch for renewed downside sensitivity to any Fed-driven inflation prints and oil/energy moves; rallies may face selling pressure until rate-cut expectations regain momentum.