Did the Fed Just Crush Crypto and Stocks’ Recovery Hopes

• Jerome Powell says the Fed won’t step in if markets drop further.
• Stock markets plunge while Bitcoin holds, but faces critical resistance.
• Crypto Banter warns crypto may soon follow stocks if weakness persists.

The Federal Reserve may have just dashed hopes for a swift recovery in both crypto and stock markets. Speaking on Wednesday, Fed Chair Jerome Powell ruled out any immediate intervention or rate cuts, triggering a sharp selloff in equities. 

While crypto markets held key levels, the Crypto Banter YouTube podcast says the risk of a delayed downturn remains high.

Markets had anticipated a potential policy shift from the Federal Reserve in light of recent volatility. However, Powell clarified that the central bank had no plans to cut rates or provide emergency support, even if stocks continued to fall. He emphasized that markets are “functioning as they should,” despite growing uncertainties.

The comments triggered a sharp selloff across major U.S. indices. Tech giants Nvidia and Tesla dropped 10% and 8% respectively, while the Nasdaq Composite fell 4%, mirrored by the QQQ ETF.

Related: Powell Speaks, Stocks Sink: Fed Chair Worried About Trump Tariff Fallout

Notably, the current market sentiment paints a stark picture. The stock market is in a state of significant fear, registering a low reading of 14 on the Fear and Greed index. 

In contrast, crypto markets are marginally less fearful at 30. These readings indicate that investors in both sectors are wary, despite crypto’s relative stability compared to traditional equities.

Crypto Holds—But For How Long?

Unlike equities, the crypto market remained relatively stable. Bitcoin stayed above $83,000 during the market turmoil. It now trades at $84,612, a 1.3% rise in the past day. The Crypto Banter YouTube channel noted this unusual resilience but warned that crypto often lags behind traditional market moves.

“This isn’t the first time Bitcoin holds up while stocks fall—only to follow later,” one analyst said. “The current stability may be short-lived.”

Bitcoin now faces a critical test. A breakout above $85,500 could signal a move toward $90,000 and $93,000. However, failure to stay above $83,000 risks a broader selloff.

BTC Key Levels and Technical Signals

According to Banter, Bitcoin is contending with triple resistance: the 50-day and 200-day moving averages and a key horizontal level. 

Because of this resistance, the market remains range-bound. This choppy action is liquidating both longs and shorts rapidly, suggesting a significant breakout looms.

A close above current resistance could attract new buying interest. However, a breakdown below the support may confirm a delayed correlation with the falling stock market.

“Every day Bitcoin flirts with a breakout, only to get slammed back down,” the analyst added. “If it takes out yesterday’s low, the setup looks bearish.”

What About Altcoins?

While Bitcoin holds steady, altcoins remain under pressure. Most are locked in downward trends with no clear signals of reversal. Ethereum, Solana, and SUI are all testing demand zones but haven’t confirmed a shift in momentum.

Related: China Stocks Crash 7% While US Markets Soar: Crypto Implications

Traders are urged to avoid taking heavy positions in altcoins until a stronger bullish structure emerges. “It’s not time to ape into altcoins,” said the analyst. “Preserve capital and wait for clearer signals.”

What Does Stablecoin Dominance Indicate?

The USDT dominance chart, a gauge of stablecoin market share, remains elevated, signaling a risk-averse environment. A breakdown in this chart could precede a bullish breakout in crypto, but the current structure favors caution.

Bitcoin typically moves inversely to USDT dominance. That means a drop in stablecoin dominance might come before Bitcoin’s next rally. Until that happens, analysts recommend low-risk trading strategies and strict risk management.