- Federal Reserve reforms trigger macroeconomic uncertainty with cryptocurrency price fluctuations:

Global markets continue to face macroeconomic uncertainty amid Federal Reserve reforms. After the U.S. central bank kept the target interest rate within the 3.50% to 3.75% range on January 28, President Donald Trump nominated Kevin Warch to succeed Jerome Powell as Federal Reserve Chair.

Market participants are reassessing Warch's previous hawkish stance as Fed Chair, leading to instability and sharp sell-offs in precious metals like gold and silver, as well as digital assets.

KAIKO Research stated that, amid a rebound in gold and silver prices, "This decline came as markets reevaluated Warch's nomination. While initial reactions focused on the hawkish policy, Warch's reputation as a defender of Federal Reserve independence gradually reassured investors."

Although Bitcoin shows short-term signs of a reversal above $76,000 and toward the key level of $80,000, a report from K33 Research indicates that the cryptocurrency market may be mimicking price movements seen in sell-offs in 2028 and 2022.

"Despite stronger institutional and regulatory support factors, including $55 billion in inflows into regulated products, expanded access for advisors, and banks launching crypto services amid a backdrop of accommodative interest rates, market psychology and profit-taking have reinforced ongoing selling pressure," K33 Research stated in its Tuesday report.

Meanwhile, Bitcoin faces prolonged declines in the derivatives market. Open interest in futures contracts fell for the first time since April, dropping to $50.5 billion on Wednesday, confirming retail investors' lack of confidence in Bitcoin's ability to sustain a short- to medium-term bullish trend. The average open interest was $52.4 billion on Tuesday, well below the record $94.1 billion set on October 7.

Open interest in Bitcoin futures | Source: Coin Glass
Ethereum is also experiencing retail investor outflows, who continue to reduce their risk exposure amid increasing uncertainty. The decline in open interest in futures contracts to $26.3 billion on Wednesday from $28.3 billion the previous day weakens Ethereum's ability to rebound from its recent low of $2,110. Open interest reached a record high of $70.1 billion in August, highlighting the need for steady retail investor demand to support the next recovery phase.

Open interest in Ethereum futures | Source: Coin Glass
Similarly, XRP's price remains low, with derivatives demand slowing to $2.6 billion on Wednesday from $2.9 billion the day before. The open interest in futures contracts has not exceeded $5 billion since the October 10 crash and remains well below the record high of $10.9 billion on July 22.

Open interest in XRP futures