Bitcoin Price Forecast: BTC Eyes $70K as Fed Rate Cut Hopes Fade on Warsh Buzz

Bitcoin (BTC) has entered the breakdown stage of its prevailing bearish continuation pattern, as the Donald Trump administration may nominate Kevin Warsh as the next Federal Reserve chairman.

Bitcoin Technical Analysis: $70,000 Still On Table

BTC’s price broke below the lower trendline of its bear flag pattern, indicating more downside in February.

Bear flag breakdowns typically result in the price falling by as much as the previous downtrend’s height. Applying this technical rule on the BTC/USD chart brings $70,000 or nearby levels as the next downside targets.

On a positive note, Bitcoin’s daily relative strength index (RSI) is nearing the oversold threshold of 30. A decline below that reading increases the odds of Bitcoin rebounding toward interim upside targets.

In this case, that interim target could be the bear flag’s lower trendline inside the $86,000–$87,000 area.

A move above the zone could even invalidate the bear flag breakdown setup, instead sending the BTC price toward the upper trendline range around $98,000–$100,000.

Risk-On Warning: Warsh is Notoriously Hawkish

Investors view Warsh, a former Fed governor, as a “hard money hawk,” especially on US inflation and the risks of keeping policy too loose for too long.

He visited the White House on Thursday, which raised expectations that Trump will pick him as the next Fed president. As of press time, Warsh’s odds of becoming the chairman were 92% on the Polymarket betting platform, up from 10% last month.

“If Warsh is the nominee for the next Fed chair, markets may need to rein in expectations,” said Tim Waterer, chief market analyst at KCM Trade, adding:

“Warsh is probably more hawkish compared to the other short-listed candidates, which may dampen expectations for further rate cuts.”

Higher-for-longer rates typically reduce the appeal of non-yielding assets like equities, commodities, and cryptocurrencies. This sentiment was visible across the market, with traders dumping stocks, gold, silver, Bitcoin, and other assets.

The US dollar rose, which, in my view, represents a short-term hedge until the final decision.

The selection of Warsh is not final until Trump announces it by Friday.