Bitcoin Whipsaws After Powell Shock as Privacy Coins Steal the Spotlight

Bitcoin delivered another reminder of how tightly crypto remains wired to global macro shocks. Prices jumped more than 2.3% overnight, briefly touching around $92,400, after reports surfaced suggesting potential criminal charges against Federal Reserve Chair Jerome Powell. The move, however, proved short-lived. As European markets opened, bitcoin slid back to roughly $90,700, right where it had traded over the weekend.

The initial rally wasn’t happening in isolation. Traditional safe havens lit up at the same time, with gold climbing about 2% and silver surging 5.6%, while risk assets faltered. Nasdaq 100 futures fell roughly 1%, and the U.S. dollar index (DXY) weakened, signaling growing uncertainty around the future path of U.S. interest rates.

The overnight spike reflected knee-jerk reactions to the Powell headlines rather than a shift in longer-term fundamentals. Traders rushed to hedge against political and policy instability, lifting bitcoin alongside precious metals. But once the dust settled, momentum faded quickly, suggesting that conviction behind the move was thin.

That pullback caught many traders off guard. In the past 24 hours alone, more than $200 million in leveraged futures positions were liquidated, with bullish bets making up roughly half of the total. The speed of the reversal from the Asian session exposed how crowded some short-term long positions had become.

While bitcoin struggled to hold onto its gains, several altcoins showed surprising resilience. Privacy coins led the charge, with monero (XMR) hitting a record high near $576, up more than 12% since Sunday evening. Zcash (ZEC) also outperformed, climbing 3.8% as it continued to recover from last week’s governance-related turbulence.

This selective strength is beginning to show up in broader market indicators. CoinMarketCap’s “altcoin season” index has risen to 30/100, pulling out of “bitcoin season” and into neutral territory for the first time since November 18. It’s not a full-blown altcoin rally yet, but it does suggest that capital is becoming more willing to rotate away from bitcoin.

Under the hood, derivatives markets paint a more cautious picture. Implied volatility indexes for BTC and ETH remain subdued, indicating expectations for relatively calm price action in the near term despite the headline-driven swings.

Open interest across major tokens—including BTC, ETH, XRP, SOL, and DOGE—declined between 1% and 4% over the past day, pointing to a reduction in risk exposure. Funding rates remain moderately positive overall, which suggests a lingering bullish bias, but not the kind of aggressive positioning seen during stronger uptrends.

Monero is the clear exception. Open interest in XMR futures has climbed to 369,000 XMR, the highest level since February last year. Combined with rising prices, this suggests fresh capital entering the market and helps validate the ongoing uptrend. Still, caution flags are starting to wave: annualized funding rates are approaching 80%, a sign that bullish positioning may be overheating.

Options markets reinforce this defensive stance. On Deribit, BTC and ETH put options continue to trade at a premium to calls across all maturities, indicating sustained demand for downside protection. Block flow data shows traders favoring iron condor strategies in bitcoin, typically used when prices are expected to stay within a narrow range. In ethereum, calendar spreads dominated activity, reflecting uncertainty about timing rather than direction.

Beyond privacy coins, Solana (SOL) emerged as the strongest performer among major tokens. SOL is now 2.7% above Sunday’s low of $135, buoyed by a renewed surge in memecoin activity. Token-launch platform Pump.fun recorded more than $1.6 billion in trading volume over the past 24 hours, a clear sign that retail traders are back in force.

That frenzy has produced eye-watering numbers. Newly issued memecoins such as “whale guru” reportedly surged by over 146,000% shortly after launch, generating $10.5 million in volume and triggering a wave of copycat token launches as creators race to capitalize on the hype.

Not all altcoins shared in the optimism. Aerodrome Finance’s AERO token jumped about 10% from Sunday’s lows before giving back part of the move and settling near $0.57. Meanwhile, Lighter’s LIT token fell more than 10% as excitement around its recent airdrop faded. Polygon’s POL continued its slide as well, now down over 15% from Saturday’s peak of $0.1867.

The latest price action underscores a familiar theme: bitcoin remains highly sensitive to macro and political shocks, while pockets of the altcoin market are increasingly driven by narratives—privacy, memecoins, and speculation—rather than broad risk-on sentiment.

For now, traders appear caught between caution and curiosity. Bitcoin is consolidating, volatility expectations are muted, and hedging demand remains strong. At the same time, selective altcoin rallies suggest that capital hasn’t left the market—it’s simply becoming more discriminating.

Whether this balance holds will likely depend less on crypto-specific news and more on how the broader interest-rate and political landscape evolves in the days ahead.