The market sentiment just pulled a violent U-turn. The nomination of Kevin Warsh as the future Fed Chair has sent a lightning bolt through the risk-asset landscape, forcing a massive repricing of interest rate expectations for 2026. 🏛️
Here are the critical takeaways from this sudden market shift:
🦅 The Warsh Factor: The nomination of a perceived hawk has decimated short-term optimism. Bitcoin briefly fell below 75,000 USD and ether below 2,500 USD as traders braced for a more restrictive monetary policy.
📉 Yield Pivot: Market expectations have shifted from 2-3 rate cuts down to a potential 1-2 cuts this year. All eyes are now on this week’s data releases to see if the Fed's trajectory has permanently altered.
💸 ETF Exodus: Fear is tangible in the flows. US-listed ETFs saw over 1.8 bln USD in redemptions, with bitcoin ETFs losing 1.5 bln USD. BlackRock’s upcoming 'Bitcoin Premium Income' ETF—a covered call strategy—signals that even the giants are preparing for a sideways or bearish environment.
🔄 Exchange Inflow Surge: Investors deposited over 12.7k BTC into exchanges, pushing the total balance to a two-month high of over 3 mln BTC. This unanimous inflow across all cohorts indicates a strong collective intent to liquidate.
⚖️ Holder Hand-Off: We are seeing a massive structural shift. Long-term holders (LTHs) reduced their positions by 372k BTC in late 2025, while short-term holders (STHs) grew their holdings by nearly 25%. This 'weak hand' accumulation often precedes heightened volatility.
The Bottom Line: While we are seeing a minor recovery this morning, the lack of a 'dovish' catalyst suggests this may be a technical rebound for bargain hunters rather than a sustainable trend reversal.
How are you repositioning your portfolio in light of the new 'Hawkish' Fed narrative?