Bitcoin Slips Below $71K as Powell Flags Energy-Driven Inflation
Bitcoin slipped below $71,000 after Fed Chair Jerome Powell warned that rising energy prices could keep inflation pressures elevated. Powell said oil-driven shocks are already reflected in the Fed’s projections, but the duration of the impact is uncertain.
Even with policy expected to stay steady, the Fed’s inflation outlook turned more hawkish. The 2026 inflation forecast was raised to 2.7% from 2.4%, implying the inflation challenge may last longer. Powell also argued the situation is not 1970s-style stagflation, citing unemployment near long-run norms and inflation only slightly above target.
The renewed inflation and geopolitical fears tied to the Iran conflict triggered broad risk-off selling. Bitcoin traded around $70,900, down nearly 5% in 24 hours, while Ethereum fell about 6.5%. US equities also slid (S&P 500 -1.4%, Nasdaq -1.5%), and gold hit a more-than-month low below $4,850.
For crypto traders, the key signal is that Bitcoin can move quickly on Fed inflation guidance—especially when energy-price shocks re-enter the narrative—raising near-term volatility risk.
Bearish
Powell’s message reintroduced energy-driven inflation risk into the Fed narrative and raised the 2026 inflation forecast. For Bitcoin, that typically means markets re-price fewer or later rate cuts, tightening financial conditions and worsening near-term liquidity sentiment. The broad selloff across crypto and traditional risk assets (and crypto asset beta falling along with tech equities) supports a bearish read for BTC in the short term, with elevated volatility likely until the energy/inflation path becomes clearer.