Trump’s Fed Pressure Spurs Market Volatility: Dollar Weakens, Bitcoin Hits Key Resistance, and Crypto Markets React

Bitcoin Faces Stiff Resistance at $116,000 Amid Broader Market Recovery

The cryptocurrency market showed signs of recovery on September 16 ahead of the Federal Reserve's Federal Open Market Committee (FOMC) interest rate decision. Bitcoin (BTC) rebounded to $116,601, marking a 1.02% rise in 24 hours, according to CoinMarketCap. However, this rally failed to overcome a critical resistance level around $116,800, a point that aligns with a trendline connecting historical peaks from the 2017 and 2021 bull runs. Despite positive momentum, Bitcoin's inability to break past this threshold raises concerns over potential downside pressure.

Omkar Godbole, Senior Technical Analyst at CoinDesk, remarked, “Bitcoin is encountering resistance at this price level for the third time. Failing to break above it may increase downside pressure.” He further noted that Bitcoin is losing momentum within the Ichimoku cloud, with a decisive move above or below its boundaries likely to dictate the next trend.

In the CME Bitcoin futures market, September contracts rose by 1.05% to close at $116,785, while November contracts advanced by 1.10%. Analysts interpret these movements as the market positioning itself in anticipation of a potential Fed rate cut.

Trump’s Influence and Rising Treasury Issuance Add Pressure to Fed Decision

Market dynamics remain heavily influenced by uncertainties surrounding the Federal Reserve’s monetary policy. While traders are pricing in expectations of a 25-basis-point rate cut, political and fiscal risks loom large. Former President Donald Trump has amplified these risks by openly criticizing Fed Chair Jerome Powell, calling for more aggressive rate reductions, and exerting pressure on the central bank.

The broader economic outlook is also clouded by increased U.S. Treasury issuance, which, combined with Trump’s assertive rhetoric, has rattled financial markets. Political interference in monetary policy has heightened concerns about credibility, with the dollar and long bonds emerging as the primary assets absorbing the shock from these tensions.

Gareth Nicholson, Chief Investment Officer at Nomura Asset Management, pointed out, “If politics distorts policy, any dollar rebound should be treated as a selling opportunity.” He added that the dollar and long-term bonds act as “shock absorbers to market disruptions,” reflecting the immediate impact of policy risks.

U.S. Dollar and Treasury Yields Slide Amid Credibility Concerns

The foreign exchange market mirrored these uncertainties, with the U.S. Dollar Index (DXY) dropping 0.7% to 96.26, its lowest level since July. Concurrently, the dollar hit a four-year low against the euro, highlighting reduced confidence in U.S. monetary policy direction.

The ripple effects extended to Treasury markets, where the 10-year yield declined to 4.03%, marking a five-month low. Analysts attribute this to mounting speculation around the Fed’s potential dovish pivot and the shadow cast by political meddling. The central bank’s forthcoming dot plot projections and Chair Powell's commentary are expected to provide essential guidance on their policy trajectory.

Ethereum Awaits Breakout from Symmetrical Consolidation Pattern

Ethereum (ETH) declined slightly by 0.24%, trading at $4,483. The second-largest cryptocurrency by market cap continues to consolidate within a narrowing symmetrical triangle pattern. This technical formation indicates balance between buying and selling forces and typically precedes a decisive breakout.

Omkar Godbole explained, “Ethereum is currently directionless as both buying and selling momentum have waned.” Whether ETH exits this pattern to the upside or downside will determine its next major move.

Solana and Altcoins Show Mixed Signals Amid Resilience

Among other cryptocurrencies, Solana (SOL) registered a gain of 1.73% to $237 but triggered caution by forming a "Shooting Star" candlestick on its daily chart. This pattern, commonly indicative of bearish reversals near peak levels, suggests that strong intraday buying pressure was countered by significant selling momentum before market close.

Godbole remarked, “This pattern is a typical bearish signal near peak levels. If prices fall further the following day, the signal’s reliability increases.” He warned that Solana’s failure to reclaim $250 could open the door to broader downside risks.

On the other hand, the altcoin market displayed resilience, led by Binance Coin (BNB) and Dogecoin (DOGE). BNB surged 3.53% to $952, achieving a weekly gain of 8.68%, while DOGE rose 1.25% to $0.2679, delivering an impressive weekly gain of 10.72%.

Other notable gainers included XRP (+1.27%), Cardano (ADA, +1.47%), and Tron (TRX, +0.34%), underscoring improved risk appetite among crypto investors. Notably, the Alternative Crypto Fear and Greed Index held steady at a neutral 50, signaling balanced sentiment amid ongoing market uncertainties.

Conclusion: Markets on Edge as FOMC Decision Looms

The convergence of political pressure on the Federal Reserve, economic uncertainties tied to Treasury issuance, and technical resistance levels in the cryptocurrency market creates a complex environment for traders and investors. Bitcoin’s struggles near $116,000, Solana’s bearish signals, and Ethereum’s consolidation phase underscore the cautious sentiment within the digital asset space.

Meanwhile, the U.S. dollar’s slide to multi-year lows and falling Treasury yields reflect the broader market's anticipation of a dovish turn by the Fed, even as credibility questions linger. As the FOMC meeting approaches, all eyes are on Powell’s remarks and the central bank’s projections, which will likely set the tone for the next phase of movements across traditional and digital asset classes alike.

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