Trump-Powell Standoff Escalates. Is a Cryptocurrency Market Rally Imminent?

TradingKey - The struggle between Trump and Powell has reached a fever pitch; the crypto market is poised for a breakout, and Bitcoin prices are expected to trend upward.

On Tuesday (January 13), the Bitcoin ( BTC )-led cryptocurrency market continued to oscillate, with total market capitalization holding at $3.1 trillion. Currently, the price of Bitcoin is $91,314, still within an ascending triangle as its technical structure remains intact.

Bitcoin Price Chart, Source: TradingView

It is evident that Bitcoin has tested the $95,000 resistance level three times and is nearing the apex of the triangle, signaling an imminent breakout. However, when will Bitcoin decide on its direction? Will it be to the upside or the downside?

Typically, after a period of consolidation, a breakout at a critical juncture is often triggered by fundamental news, and Bitcoin is no exception. Current market conditions suggest a breakout is highly likely this month, driven by the upcoming January Fed meeting and the escalating confrontation between Trump and Fed Chair Jerome Powell.

Last Sunday (January 11), Powell publicly stated that the Fed received a grand jury subpoena from the Department of Justice regarding a potential criminal indictment against him, primarily related to cost overruns for the renovation of the Fed's headquarters. Powell claimed the subpoena was merely a pretext and vowed to continue resisting pressure from Trump.

Meanwhile, former Fed Chair Janet Yellen voiced her support for Powell, stating, "I know Powell very well; the probability of him committing perjury is zero. I do believe they are targeting his seat to force him out." Trump's actions have also drawn dissatisfaction from Ben Bernanke and Alan Greenspan, and have been criticized by some lawmakers, including Republican Senators Kevin Cramer and Lisa Murkowski.

Despite widespread opposition, Trump remains resolute in his push to oust Powell and has publicly stated that he has already found a suitable candidate. If Trump eventually prevails and installs his preferred choice, the Fed's rate-cutting cycle this year could accelerate, potentially upending expectations for the upcoming policy meeting.

On January 28, the Federal Reserve will hold its first interest rate meeting of 2026. According to CME data, the market widely expects a 96.1% probability that the Fed will maintain interest rates this month, with only a 3.9% chance of a 25-basis-point cut. Clearly, current expectations are unfavorable for the crypto market and are weighing on Bitcoin prices.

Looking ahead, if Trump cannot turn the tide before the policy meeting, and Powell remains at the helm of the Fed, Bitcoin prices will continue to face downward pressure, potentially struggling to hold the $90,000 support level. Conversely, if a reversal occurs, Bitcoin is poised for an upside breakout, with a strong possibility of breaching the $100,000 milestone.