Bitcoin strength under question as DOJ Fed Probe Looms

The key takeaways

• Bitcoin ETFs show institutional investors selling Bitcoin, with net outflows of $1.38 Billion in four trading sessions. 

• BTC Futures Data shows that the basis rate is neutral at 5%, which is well below 10%, which typically marks a bullish breakout.

BitcoinBTCThe price of briefly surged above $92,000 Monday, after US Federal prosecutors began a criminal inquiry into Federal Reserve chair Jerome Powell. Bitcoin traders are still skeptical despite the strange outcome due to outflows of exchange-traded funds and a lackluster demand for leveraged bullish BTC positions.

Bitcoin has still fallen 23% from October 2025 to the present, while Gold and Silver reached their all-time highest levels in 2026. This disparity has caused traders to wonder if the narrative of digital stores-of-value is in decline. Investors may be hesitant to become bullish even if Bitcoin gains another 14% towards $105,000. This is because analysts are less confident in the US’s ability to deliver economic stimulus.

Goldman Sachs does not expect an interest rate reduction in March. citing Sticky inflation data and resilient labor markets despite temporary slowdowns. US President Donald Trump publicly criticized the Fed’s decision to keep interest rates at a high level, despite the fact that inflation was above the target of 2% throughout the second quarter of 2025. Powell’s tenure as Fed chairman ends in April. This opens the door to a possible successor who may be more inclined towards a looser monetary policies.

Powell is being investigated over the Fed’s building renovation project, prompting analysts to question whether central bank independence could be at risk—a scenario that could favor alternative scarce assets such as Bitcoin. Powell said that this action must be considered in the context of Trump’s administration. 

Bitcoin does not hold up to $94,000 in spite of major corporate purchases

BTC data shows that even as Bitcoin returned to $91,000 in Monday’s trading, there was little enthusiasm among traders for a bullish turn.

The power struggle between Trump and the Fed has not changed the risk profile of Bitcoin. As the BTC Futures Annualized Premium, or Basis Rate, remains near neutral to bearish 5%. BTC futures are usually trading 10% or higher above spot market prices during periods of bullish sentiment.

Bitcoin Spot ETFs have been recorded. $1.38 billion in net outflows across four consecutive trading days. Bitcoin’s inability to maintain levels above $94,000 for the last month is even more worrying. adding $1.25 billion BTC worth Michael Saylor, the company’s CEO, announced Monday that it had made its biggest Bitcoin purchase since July 20,25.

Related: Bitcoin to hit $2.9M by 2050 as it muscles into global trade–VanEck

Bitcoin is a hedge against the conventional financial system. However, it is unlikely that the US Dollar is facing a crisis of confidence. The US government’s debt remains investment grade despite the 601 billion dollar fiscal deficit that was recorded during the last three months of the year 2025. In the meantime, the yields for 5-year Treasury bonds have not risen above 3.8% in the last few months.

The US dollar, as measured by DXY, would have likely weakened if traders had been bracing themselves for a possible economic slowdown. In fact, it has rebounded up to 99 after a low of 96.7 late in November 2025. There is no evidence that a trade in debasement has taken place, even though precious metals are on the rise.

Let’s face it, Bitcoin and cryptocurrency appeal remains muted, as evidenced by the ETF flows, and muted interest in leveraged BTC, which suggests that there are low chances of a sudden rally towards $105,000.

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