On January 30, 2026, U.S. President Donald Trump officially nominated former Federal Reserve governor Kevin Warsh to the post of Chair of the Federal Reserve. According to reports from AMBCrypto, Warsh had previously spoken favorably of Bitcoin as a store of value and is considered pro-crypto in general. However, markets expected Warsh's policy stance to be one of interest rate cuts as well as aggressive balance-sheet reduction. The crypto markets had already shifted into a bearish regime and did not take Trump's announcement favorably. Bitcoin fell by 7% from $84.6k to $78.7k following the announcement, with the wider crypto market recording the highest liquidations for 2026. The Federal Reserve has maintained rates steady between 3.50% and 3.75% through five consecutive decisions this year, with the next meeting scheduled for September 15-16, 2026.
The price slide resulted in $2.407 billion in long positions liquidated across the market, compared to $154.7 million in short positions, as reported by AMBCrypto. This represents the heaviest crypto liquidations seen so far in 2026, with the expected difference in leadership from the previous chair, Jerome Powell, leading to uncertainty and sell-offs in crypto. The Federal Open Market Committee (FOMC) sets the U.S. national monetary policy, with the Fed maintaining interest rates between 3.50% and 3.75% for five consecutive times in 2026. Without a shift to looser monetary policy or dovish signals, Bitcoin may continue to face selling pressure amid tight liquidity and high interest rates.
Despite the recent selloff, Bitcoin has shown some technical resilience by surging past the Short-Term Holder Realized Price of $67,000-$69,000 for the first time since May, signaling a potential shift in market momentum. However, the Long-Term Holder Realized Price remained steady near $49,200, indicating no major sell-off from long-term investors. According to data from AMBCrypto, the crypto liquidations during each rate decision announcement have been around the $300 million-$500 million threshold, barring the January announcement which saw nearly $1 billion wiped out in crypto derivatives markets. Of the five decision days so far, three (January, March, and June) have been clear bearish pivots, while others were indecisive or saw bullish upticks.
As reported by AMBCrypto, the FedWatch Tool shows a 65.2% probability of another rate decision maintaining rates at 3.50%-3.75% and a 34.8% chance of a rate hike to 3.75%-4.00%. Crypto intelligence platform Santiment highlighted how Bitcoin had reacted differently to each of the three previous rate decisions, with Powell's final meeting on April 29th delivering a bullish reaction that led to Bitcoin reaching $82.5k in May. However, analysts note that long rates climbing higher means investors are losing confidence due to tightening monetary conditions, with the 10-year Treasury note yield reaching 4.7% and the 30-year note yield above 5.2%, a record not seen since 2007. The uncertainty ahead of the September FOMC meeting continues to weigh on crypto markets.
