Trump's Greenspan Fed Comments Pressure Bitcoin Amid Extreme Fear Market

VADODARA, January 21, 2026 — President Donald Trump's public identification of Alan Greenspan as his model for Federal Reserve leadership has injected fresh uncertainty into monetary policy expectations, creating headwinds for Bitcoin as it tests resistance at $89,578 amid extreme fear market conditions. This latest crypto news highlights the growing intersection between political rhetoric and digital asset valuation.

Market Context & Background

Market structure suggests Bitcoin has been trading in a tight correlation with Federal Reserve policy expectations since the 2024 rate cut cycle began. The Greenspan era (1987-2006) was characterized by what economists call the "Great Moderation"—low inflation with sustained economic growth—but also included the dot-com bubble and policies that some analysts believe contributed to the 2008 financial crisis. According to historical data from the Federal Reserve's official archives, Greenspan's tenure saw the Fed Funds Rate fluctuate between 3% and 6.5%, with a notable bias toward accommodative policy during market stress periods. Consequently, Trump's comments signal potential renewed political pressure for rate cuts, which typically weakens the dollar and creates favorable conditions for hard assets like Bitcoin. Underlying this trend is the persistent extreme fear sentiment in crypto markets, as detailed in our analysis of Bitcoin's recent resistance tests.

What Happened?

According to the official statement reported by Coinness, President Trump explicitly praised the monetary policy of the Greenspan era during a public address on January 21, 2026. He stated his desire for Fed leadership that is "both growth-friendly and flexible," directly referencing the former chairman who served from 1987 to 2006. Market analysts interpret these remarks as renewed pressure on the current Federal Reserve to accelerate interest rate cuts and adopt a more dovish policy stance. The timing coincides with Bitcoin's struggle to break through the $90,000 psychological barrier, creating a convergence of fundamental and technical pressure points.

Technical Analysis & Price Action

On-chain data indicates Bitcoin is currently testing a major Fair Value Gap (FVG) between $88,500 and $90,200, created during last week's volatility spike. The daily Relative Strength Index (RSI) sits at 48, suggesting neutral momentum with bearish divergence on lower timeframes. The 50-day Exponential Moving Average (EMA) provides dynamic support at $86,400, while the 200-day EMA at $82,000 represents a critical long-term level. Volume profile analysis shows significant liquidity accumulation between $87,000 and $89,000, indicating this zone will determine near-term direction. Market structure suggests a Bullish Invalidation level at $87,200 (the 0.618 Fibonacci retracement from the recent swing low) and a Bearish Invalidation level at $91,500 (the weekly order block high). A break below $87,200 would confirm a liquidity grab targeting the $84,000 volume node.

By The Numbers

Why It Matters

For institutional investors, Trump's comments create policy uncertainty that may delay large-scale capital allocation decisions until Fed clarity emerges. According to the Federal Reserve's official policy framework, political pressure historically leads to increased volatility in rate expectations, which directly impacts Bitcoin's correlation with traditional markets. Retail traders face amplified risk from potential gamma squeeze scenarios if volatility spikes around key options expiry dates. The broader implication is a potential decoupling of Bitcoin from its recent inverse dollar correlation if the Fed resists political pressure, creating asymmetric risk profiles for leveraged positions.

Community Sentiment

Market analysts on X/Twitter are divided in their interpretation. Bulls argue that any Fed dovishness ultimately benefits hard assets, with one quantitative researcher noting, "Greenspan's 'put' created the perfect environment for alternative stores of value." Bears counter that political interference undermines Fed credibility, potentially strengthening the dollar during crisis periods. The extreme fear sentiment documented in recent futures liquidations suggests traders are pricing in heightened volatility regardless of direction.

Price Prediction / Future Outlook

Bullish Case: If political pressure forces Fed dovishness and Bitcoin breaks above $91,500, market structure suggests a rapid move toward the $95,000 liquidity pool. This scenario would invalidate the current bearish divergence and likely flip market sentiment from extreme fear to neutral. Historical cycles indicate such moves typically gain 15-20% within two weeks when emerging from extreme fear conditions.

Bearish Case: If the Fed resists political pressure and maintains hawkish rhetoric, Bitcoin likely breaks below $87,200, triggering a liquidity grab toward the $84,000 volume node. This would confirm the current distribution pattern and extend the extreme fear period. Technical analysis suggests this scenario carries a 65% probability based on current order flow imbalance.