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TLDR:

• Markets have moved risk-off following confirmation of Kevin Warsh as Trump’s Fed Chair nominee, with USD and yields higher and equities, gold, and crypto lower.
• Bitcoin has broken down from $90k into the low $80k’s, driven by spot selling, ETF outflows, negative funding, and a deeply negative Coinbase Premium.
• On-chain and flow data remain cautious (LTH selling, ETF outflows), suggesting downside risk may persist in the near term.
• $74k-$78k is our preferred buy zone for BTC, where multiple technical and on-chain support levels converge.
• For now, patience is warranted as markets digest the Fed shift and broader geopolitical risks.

Topics covered:

• Markets Price in Warsh.
• Markets' Reaction to Warsh.
• Bitcoin Breaking Down?
• Cryptonary's Take.

Markets Price in Warsh:

On Thursday evening, President Trump announced that he'd be revealing his nominee for the Fed Chair position when Powell is due to vacate the position in May 2026. As this happened, the odds of Kevin Warsh becoming Trump's nominee soared on prediction platforms, with his odds on Polymarket increasing from 28% to 93% likelihood that he'll be nominated.

Kevin Warsh becomes an overwhelming favourite for Fed Chair nomination:

When we began writing this update (Friday morning UK time), Warsh hadn't been confirmed by President Trump, but in the last hour, the President confirmed Kevin Warsh as his Fed Chair nomination.

Warsh is a peculiar choice.

Kevin Warsh has historically been an inflation hawk, even at times when others had seen greater risks to growth and employment - although this was post GFC in 2009-2011, a long time ago now. Alongside this, he has been bearish on the balance sheet and advocated against QE back in 2020 and 2021. However, Warsh is pro-Bitcoin, and he is seen as likely to be in favour of lowering interest rates, which is in line with the current administration's thinking.

The big question now will be: are we going to see the typically hawkish Warsh or is this a different Kevin Warsh that's going to shake up the Fed and look to cut rates aggressively in line with what the Trump administration wants? We expect we'll see a more dovish Warsh as it's highly unlikely that President Trump would appoint someone that's outright hawkish.

Markets' Reaction to Warsh:

Warsh being an inflation hawk, despite the fact he's probably getting this nomination because he's made promises to cut rates to President Trump, has resulted in a risking-off in markets.

That is:

• Dollar strength (DXY rebounding).
• Bond Yields up, particularly at the long-end, although the front-end is pulling back again. Yield curve steepener.
• Gold/Silver both down.
• Equity indexes down.
• Crypto down.

In the short-term, there is potential for this move (risk-off) to extend further, and should it extend further, it would likely be over-extended at that point and you could expect a significant mean reversion bounce. In short, the market is probably over-reacting to this news.

Bitcoin Breaking Down?

Bitcoin has reacted in line with the risk-off move that we've seen across all assets. This was led by large Spot selling (as we can see in the Aggregated Spot CVD on the chart below). This resulted in a small leverage flush out that then saw Funding Rates go from being meaningfully positive to negative.

Mechanics behind the move down in BTC:

Ultimately, the flows behind this move down are quite negative. We had large ETF outflows yesterday, whilst there is currently a very negative Coinbase Premium.

Recent ETF flows have been quite negative - outflows:

Negative Coinbase Premium:

But note, the last time we saw the Coinbase Premium become very negative, the reversion back to neutral sent BTC higher, and we're now potentially at the lower bound where a reversion move could happen.

Unfortunately, we remain cautious here as the market digests Kevin Warsh as Trump's Fed Chair nomination and it weathers the geopolitical tensions between Iran and the US.

This is also only emphasised further when we see Long-Term Holders have recently increased their selling again.

Long-Term Holder Net Position Change:

This risk-off move has confirmed our thinking from earlier in the week. Our expectation was for BTC to break down from the $90k level, targeting the low $80k's. Today, that has played out.

BTC breaking down from the rising wedge:

In terms of bidding, for now we're going to remain patient and wait on the sidelines. We don't like the Long-Term Holder selling that we're seeing, the ETF outflows, the negative Coinbase Premium etc. Alongside this, there seems to be increasing geopolitical tensions between Iran and the US, whilst the market digests the Warsh nomination news. This all comes off the back of a period where we've had a lot of chasing in markets as the Dollar has moved down, be it chasing equities, or more likely Gold/Silver. Therefore, it's possible that this downside move can extend slightly further.

However, should we see BTC break below $80k, we'd look to bid BTC in the $74k-$78k range. In terms of on-chain levels, $81k is the True Market Mean, $74k-$75k is Saylor's average price, and the MVRV -0.5 standard deviation chart sits at $78k.

So, between $74k and $81k, there's a lot of confluence with on-chain support levels, whilst the April 2025 lows was at $74,700. There's a plethora of support between $74k and $81k, but a move taking BTC sub-$80k would see the technical metrics also become oversold, hence our buying range is in the bottom half of that range (the $74k-$81k range) - so our bidding range is $74k-$78k at least for a bounce play, maybe more.

Cryptonary's Take:

Today's confirmation of Kevin Warsh becoming Trump's new Fed Chair nomination has led to a risk-off move in markets. This has resulted in Bitcoin pulling back from $90k into the low $80k's. In our view, the low $80k's is an area where we become interested, however, when we assess all the metrics, we'd like to see a move into the $74k-$78k region for us to become buyers of Bitcoin again.

Ultimately, $82k is an attractive level, but not when it’s not supported by the metrics. We can also pair this with a Dollar (DXY) that looks like it has bottomed in the short-term. So should we look to get Long risk assets, we'd likely be fighting against a strengthening Dollar - not historically good for risk assets.

For now, we remain patient, but should BTC get into the $74k-$78k range in the near-term, we'd look to bid that level for a mean reversion move higher, back into the mid-$80k's as a minimum target. But, a move down to $74k-$78k, we'd like to see happen soon. If price just consolidates in the low $80k's, we'll reassess our view early next week.

Currently, patience has paid, but we expect to be getting active again very soon.