Bitcoin Recovers 1% After Trump Nominates Kevin Warsh As New Fed Chair

In the latter half of the week, BTC saw a sharp drop as markets sentiment turned more cautious. The selloff was driven mainly by uncertainty around the Federal Reserve concerns that financial conditions could tighten again.

The drop accelerated as many leveraged traders were forced to close their positions in the derivatives market. As prices fell, liquidations in futures trading triggered further selling, turning an initial reaction to the news into a rapid and deeper correction.

The Bitcoin price, as a result, fell to a 2-month low around $81,300, which resulted in an oversold condition in the market.

BTC price is down 6.5% in the last week, even after a 1.2% jump in the last 24 hours to trade at $83,869 as of 12:58 a.m., a slight recovery that came after US President Donald Trump nominated Kevin Warsh as the new Federal Reserve Chair.

The crypto market also edged up a fraction of a percentage to a $2.83 trillion market capitalization, according to CoinMarketCap data.

The Crypto Fear and Greed Index also jumped from 16 to 20, but still in the ‘extreme fear’ levels, which shows that investors are still cautious.

Kevin Warsh Nominated as Trump Pick for Fed Chair

US President Donald Trump nominated Bitcoin-friendly Kevin Warsh as the next chair of the Federal Reserve on Friday.

Warsh’s odds of being nominated as the next Fed Chair had earlier surged from 30% to 95% on Polymarket, with the former frontrunner, BlackRock executive Rick Rieder, seeing his odds tank to 3.4%.

The nomination is seen as a good choice for crypto, as Warsh is widely seen as a nominee who would push for fiscal restraint, lower inflation, and an exit from quantitative easing. He holds a favorable view of Bitcoin, saying in July that it is an important asset that can help inform policymakers when they are doing things right and wrong.

Warsh, in a recent discussion, rejected the notion that Bitcoin would weaken the Fed’s ability to steer the economy, arguing instead that it could act as a form of market discipline.

Historically, Fed’s decisions on interest rates have mattered for crypto, as assets tend to behave like so-called risk-on investments. When interest rates are high, safer yields such as US Treasurys become more attractive, drawing capital away from volatile assets like cryptocurrencies.

Conversely, lower interest rates increase liquidity in the financial system, often pushing investors toward higher risk bets.

Warsh is seen as more hawkish than Jerome Powell, with his past criticism of quantitative easing and the Fed’s balance sheet expansion.

His nomination now sets the stage for a high-stakes Senate confirmation battle.

Bitcoin Price Slips Into Key Fibonacci Support, Downside Risk Builds

The Bitcoin price has dropped back below a major Fibonacci support zone, reinforcing the narrative of a sustained corrective move on the daily timeframe.

After a strong rally that peaked in October 2025 near the $126,000 region, Bitcoin entered a broad correction, transitioning from a clear bullish structure into a series of lower highs and lower lows.

Following a brief recovery attempt in early 2026, BTC failed to hold above the 0.236 Fibonacci retracement level around $93,450 and was rejected once again, signaling a shift in sentiment back toward the bears.

Bitcoin’s Relative Strength Index (RSI) also aligns with the bearish bias, as it continues to drift toward the 30-oversold region and currently sits around 32.97, suggesting weakening bullish sentiment.

BTC/USD Chart Analysis: TradingView

With price now trading between the 0.786 Fib level ($84,032) and the lower support at $80,629, Bitcoin is positioned in a critical decision zone. Continued failure to reclaim higher Fibonacci levels keeps the outlook cautious, as the market risks a sustained move lower.

If sellers maintain control, the price of BTC could see a deeper pullback toward the $80,600 support area on the 1.0 Fibonacci retracement and a major demand zone that previously sparked strong buying interest.

BTC crossing this zone could mean sustained bearish pressure towards the next psychological level around $75,000.

Conversely, if Bitcoin manages to hold above the 0.786 retracement and reclaim the 0.618 Fibonacci level, a relief bounce toward $88,800 (0.5 Fib) and potentially $90,850 (0.382 Fib) is possible.