Bitcoin rose 1.40%, and other major cryptocurrencies collectively advanced on Sunday evening Eastern Time. This came after Federal Reserve Chair Jerome Powell issued a warning regarding political pressures facing the central bank, with traders weighing the related macroeconomic tailwinds.
As of 11:30 PM Eastern Time on Sunday: Bitcoin was up 1.5% to $92,047; Ethereum gained 1.99% to $3,157; Among major altcoins, Solana led the gains, surging 4.81% to $142.53.
The rally swept across the entire cryptocurrency market, with privacy coins standing out most prominently: Monero skyrocketed 17.9% to $574.09, while Zcash climbed 9.76% to $410.92.
The cryptocurrency price movements occurred shortly after Powell released a video statement. In the statement, Powell disclosed that the U.S. Department of Justice had threatened criminal prosecution concerning his Congressional testimony scheduled for June 2025.
"The threat of criminal charges stems from the Fed's consistent approach to setting interest rates based on its best judgment of 'what is most beneficial for the public,' rather than yielding to presidential preferences," Powell stated. His term as Fed Chair is set to conclude in May 2026.
U.S. President Donald Trump, who has publicly criticized Powell over disagreements on the pace and magnitude of interest rate cuts, has repeatedly pressured the Fed to implement faster and deeper cuts, advocating for a reduction of the benchmark rate to 1% or lower.
Safe-Haven Rotation Peter Chung, Head of Research at Presto Research, noted that Bitcoin's ascent "coincided precisely with the release of Powell's video," while gold prices also experienced a significant concurrent surge. At the time of writing, spot gold was up 1.3% at $4,569.
"These price movements strongly suggest that Powell's comments about 'threats to Fed independence' have sparked investor concerns about the dollar-dominated traditional financial system," Peter Chung added. Confidence in the dollar's neutrality is core to its reserve currency status; "once the public fully perceives that dollar neutrality is compromised, investors will begin seeking hedges against the traditional system, and both gold and Bitcoin represent precisely such hedging assets."
Vincent Liu, Chief Investment Officer at Kronos Research, indicated that strategic buying at technical support levels and key price points further fueled the rally.
"Bitcoin and Ethereum are rising from technical support levels, accompanied by strategic buying at critical price points," Vincent Liu stated. "Against the backdrop of continuously evolving regulatory dynamics, traders are closely monitoring these movements, including news related to the potential Digital Asset Market Structure bill – legislation aimed at enhancing market transparency and liquidity."
He also mentioned that traders are focusing on three key catalysts this week: developments in the conflict between Powell and the Justice Department, updates on tax cut proposals, and the U.S. Consumer Price Index (CPI) data scheduled for release on Tuesday.
Macroeconomic Resilience Jeff Mei, Chief Operating Officer of the BTSE exchange, warned that given heightened political tensions, significant volatility could emerge after U.S. markets open. "Due to the divergence between Trump and the Fed, markets could face a downturn at the U.S. open."
However, Jeff Ko, Chief Analyst at CoinEx Research, downplayed the direct impact of the Justice Department-Fed dispute, viewing it as merely one part of the broader narrative of policy uncertainty. Jeff Ko pointed out that the current macro environment remains favorable for cryptocurrencies, citing reasons such as non-farm payroll data coming in weaker than expected, rising gold prices, and the recent completion of a market deleveraging adjustment.
Jeff Ko also emphasized that escalating geopolitical conflicts remain a key risk. "Any escalation in conflict could significantly amplify market volatility and drive safe-haven capital flows."
Andri Fauzan Adziima, Head of Research at Bitrue, stated that strong U.S. economic fundamentals are driving sustained momentum for cryptocurrencies. He noted that robust GDP growth, rising real wages, and moderating inflation naturally benefit risk asset performance.
His comments were published as Goldman Sachs adjusted its interest rate expectations, pushing back the anticipated timing of Fed rate cuts from its previous forecast of March and June 2026 to June and September 2026.
"Market expectations now point to Fed rate cuts in June and September 2026, which would further ease financial conditions and release substantial liquidity – liquidity that cryptocurrencies have historically absorbed positively. This also signals the impending early phase of a sustained bull market," Adziima added.
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