Bitcoin fell to as low as $81,000 before bouncing to the current $83,139 amid speculations that the Federal Reserve may get a more hawkish chair.
Traders responded to reports that U.S. President Donald Trump is set to nominate former Federal Reserve Board member Kevin Warsh to succeed current Fed Chair Jerome Powell.
Warsh has at times spoken positively about cryptocurrencies. However, Bitcoin tumbled late Thursday as his chances of being nominated surged on betting platforms, with some analysts now viewing him as a potentially bearish influence on the asset.
Trump to announce Fed Chair pick on Friday
Trump said late on Thursday that he would announce his pick on Friday morning, a day after sharply criticising Powell and the Fed for opting not to cut interest rates.
The world’s biggest cryptocurrency shed nearly $10,000 in the past 24 hours of trading. Crypto markets also saw heavy liquidations, with more than $777 million in long positions wiped out in early trading, rising to $1.75 billion over the past 24 hours, CoinGlass data showed.
A CoinDesk analysis indicated that a drop in Bitcoin below $85,000 could signal further declines. At present, Bitcoin is holding above its November low of slightly under $81,000, with the next key support potentially at the tariff-related April 2025 low of $75,000.
U.S. crypto legislation in focus
At a joint press conference, U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins and Commodity Futures Trading Commission (CFTC) Chair Michael Selig unveiled an initiative called Project Crypto, under which the two agencies will collaboratively implement the landmark Clarity Act for cryptocurrency regulation once it is approved by Congress.
“We have designed Project Crypto such that when Congress acts, our agencies are ready to implement any new legislation faithfully and thoughtfully,” Atkins said.
“Moving forward, that means deploying every tool at our disposal to reduce friction, to harmonize standards and definitions where appropriate, and to equip markets with confidence as Congress completes its vital work,” he added.
Read: Bitcoin slips below $88,000 as Fed holds rates, geopolitical risks weigh on risk sentiment
Broader crypto market falls
Most altcoins also declined on Friday, staying subdued amid a broader risk-off sentiment.
Ethereum, the world’s second-largest cryptocurrency, fell 6.82 percent to $2,749.69, while XRP, ranked third, dropped 6.02 percent to $1.7658. Solana and Cardano each fell more than 6 percent to $115.620 and $0.3269, respectively.
Among meme coins, Dogecoin slid 5.73 percent, and $TRUMP held steady at $0.0524.
