XWIN Japan
Bitcoin’s Reaction to Powell’s Remarks — From Expectation-Driven Rally to Liquidity Validation Phase
Following the March 2026 FOMC, Bitcoin showed a typical “buy the rumor, sell the news” reaction. Prices briefly moved higher after the announcement but quickly reversed, indicating short-term weakness. This reflects not only volatility but also a shift in market dynamics. The main driver was the fading expectation of rate cuts. While the Fed held rates steady, Chair Powell stressed ongoing inflation risks, particularly from rising energy prices tied to geopolitical tensions. This reduced expectations for near-term liquidity expansion, weighing on risk assets. Bitcoin reacted in line with macro conditions, declining alongside equities and responding to higher yields. This highlights that Bitcoin remains strongly influenced by liquidity and interest rate environments. However, on-chain data suggests no structural breakdown. Exchange reserves continue to decline, signaling reduced available supply, while ETF holdings are increasing, reflecting ongoing institutional accumulation. This divergence is important. Even during corrections, supply compression can support medium-term bullish pressure. Whale accumulation during dips further suggests long-term positioning by larger players. Additionally, spot ETF flows are stabilizing, indicating that institutional demand may be returning. Compared to previous cycles, this points to an evolving market structure. Overall, the market appears to be in a dual phase: short-term macro-driven adjustment and mid-term structural strength. Rather than signaling weakness, this phase represents a liquidity validation process within a broader constructive trend. Key factors to watch include ETF flow consistency, the $70,000 support level, and continued improvement in demand indicators.