Bitcoin Holds $84K as Fed Chair Powell Tempers Rate Cut Hopes

The gains in Solana and other major tokens suggest investor confidence is returning to the digital asset space, even as macroeconomic headwinds, particularly a more hawkish stance from central banks, continue to weigh on broader market sentiment.

Solana rose to approximately $133.31 in Thursday’s session, up 6.2% on the day and more than 16% over the past week. The token has been buoyed by increased developer activity, growing NFT volumes, and rising interest from institutional investors in Solana-based projects.

Analysts also point to Solana's reputation as a high-performance layer-1 blockchain as a driver of its outperformance. The network recently hit milestones in both transaction throughput and developer onboarding, cementing its role as a key Ethereum competitor.

Bitcoin gained around 2% on the day, reaching $84,500 before slightly retreating. While the price remains below its all-time high of $89,600 hit earlier this month, the modest rebound offers a sign of resilience amid disappointing macroeconomic news.

The key pressure point came from comments by Federal Reserve Chair Jerome Powell, who signaled a slower path to rate cuts due to persistent inflationary pressures and uncertainty surrounding newly imposed tariffs on China and other key U.S. trading partners.

“The recent inflation data has not given us greater confidence,” Powell said during a public appearance on Tuesday, suggesting that a June or July rate cut was increasingly unlikely.

Rate hikes or delayed cuts are typically bearish for cryptocurrencies, which often thrive in low-rate, risk-on environments. Still, Bitcoin's muted response to the news suggests investors are taking a longer-term view of the asset's role as digital gold, particularly in the face of growing fiscal instability.

Ethereum (ETH), the second-largest cryptocurrency by market cap, rose 1.4% to hover around $3,200. Other notable gainers included XRP (+2.1%), Dogecoin (+2.7%), and Avalanche (+3.9%). However, not all altcoins saw green, some smaller-cap tokens continued to lag behind as investors concentrated on large-cap assets amid global macro uncertainty.

Crypto stocks were more mixed. Coinbase (COIN) dropped 1.2% during early trading, while MicroStrategy (MSTR), which holds over 214,000 BTC, remained flat. Mining firms like Marathon Digital (MARA) and Riot Platforms (RIOT) posted modest gains, mirroring the broader recovery in crypto asset prices.

Despite macro challenges, analysts argue that the crypto market is showing increased maturity. Oppenheimer analysts highlighted how recent pullbacks in Bitcoin and blockchain equities have been less dramatic than those seen in 2022, when Fed tightening led to steep liquidations across the sector.

With inflation still sticky and Fed policy in limbo, crypto traders will likely keep a close eye on next week’s U.S. economic data, including retail sales and producer price index numbers. Meanwhile, the market continues to digest the impact of the recent Bitcoin halving, which occurred earlier this month and cut miner rewards in half, a development with long-term implications for BTC’s supply dynamics.

As Solana shines and Bitcoin holds steady, the broader crypto market appears to be entering a phase of cautious recalibration. While short-term volatility remains, the underlying trend suggests the sector may be preparing for its next sustained move, either up or down.