Bitcoin steady at $86,650; Trump says new Fed Chair will cut rates by 'a lot'

Bitcoin steadied near $86,600 after significant volatility throughout Wednesday.

According to bitcoin was up 0.061% in the past 24 hours to trade at $86,670 as of 12:15 a.m. ET Thursday. During early morning on Wednesday, the cryptocurrency briefly surged to around $90,000 before quickly plunging back below $86,000.

The heightened volatility is attributable to thin liquidity amid ongoing macroeconomic uncertainty, which has  weighed on traders in recent weeks.

"The recent volatility in Bitcoin stems primarily from broader risk-off sentiment in global markets, reduced ETF inflows, deleveraging in derivatives, and increased correlation with equities amid uncertainty over monetary policy and macroeconomic pressures," LVRG Research Director Nick Ruck said.

The analyst added that bitcoin's current position appears to reflect year-end portfolio repositioning, alongside fading expectations for a Santa Claus rally.

Vincent Liu, CIO at Kronos Research, echoed similar views on the current range.

"BTC sitting around $85k to $86k feels less like seasonality and more like re-pricing," Liu said. "After a strong run, flows have cooled, leverage has reset, and the market is waiting for a real catalyst. Until fresh liquidity shows up, chop is the base case."

On the potential for a deeper correction, Liu said it is not "crypto winter" yet. 

"It's a time-driven grind under heavy overhead supply, leverage already flushed, with price holding above the True Market Mean around $81k," Liu said. "Lose that level and winter risk rises."

New Fed?

Both analysts said the crypto market is expected to enter 2026 with macro uncertainties. After cutting interest rates in the past three consecutive FOMC meetings, Fed Chair Jerome Powell signaled that the central bank may not make another reduction in January.

The CME Group's FedWatch Tool currently gives a 73.4% chance that the Fed will not cut rates next month, while prediction market platform Polymarket gives 76% that rates will remain at the current target range of 3.50% to 3.75%. Still, some hopefuls expect the Fed to turn dovish after it appoints a new Chair to succeed Powell's departure in May. 

According to Reuters, U.S. President Donald Trump said on Wednesday in a speech that the next chairman of the Fed will be someone who believes in lower interest rates "by a lot." Trump previously said he wants to see the U.S. borrowing rates at a benchmark of 1% or lower.

"I'll soon announce our next chairman of the Federal Reserve, someone who believes in lower interest rates by a lot, and mortgage payments will be coming down even further," Trump said. "Early in the new year, you will see this."

On Wednesday, Trump reportedly interviewed Christopher Waller, a pro-crypto Fed Governor who has been a proponent of lower interest rates. Among five candidates, former Fed Governor Kevin Warsh and current National Economic Council Director Kevin Hassett are widely viewed as the two leading contenders.