Powell’s Last Pause: A Divided Fed, a Frozen Bill, and Bitcoin’s $250K Bull Case in Retreat

The benchmark federal funds rate stayed in a target range of 3.5% to 3.75%, a third consecutive hold, with the committee citing “developments in the Middle East” as a key source of economic uncertainty. The vote itself was the more interesting tell — an 8-4 split, with Governor Stephen Miran pushing for an immediate cut and three more dissenting against language that left the door open to easing later in the year.

For Bitcoin, the read-across was unambiguous and immediate. BTC, which had spent the morning trying to clamber back above $77,000, drifted lower on the announcement and was trading near $75,400 by late Wednesday in New York. Ether followed it down, slipping under $2,250. The pair extended what is now a multi-week decline from local highs near $79,500 on April 21, and a roughly 40% drawdown from October 2025’s all-time high near $126,000.

Bitcoin dropped to $75,643, Source: BNC

Why the Fed sat tight

The macro backdrop the FOMC pointed to is genuinely awkward. Brent crude has been pinned above $100 a barrel for most of April as ships continue to struggle to transit the Strait of Hormuz, the chokepoint through which roughly 20% of seaborne oil flows. The US national average gas price hit $4.22 a gallon this week, up 6.2% in a month — a meaningful swing in a politically sensitive headline number. Inflation is not where the Fed wants it, and three years into a tightening campaign that is supposed to be ending, the committee is again describing its outlook with the language of “high uncertainty.”

Some former officials see no relief coming. Jerry Tempelman, a former senior analyst at the New York Fed and now vice president of economic and fixed-income research at Mutual of America Capital Management, wrote on Wednesday that the disruption to Middle Eastern oil infrastructure and shipping “could result in prolonged pricing stress that trickles through the market,” concluding that a 2026 cut now looks unlikely absent a more severe energy or labor-market shock. CME FedWatch shows traders agree, with rates priced to remain on hold through December.

For risk assets that spent the previous cycle conditioned on cheap dollars, this is the opposite of fuel.

The CLARITY trade unwinds

Crypto’s other rate-cut substitute — regulatory clarity — is also becoming harder to underwrite. Prediction markets aggregated by Kalshi now show the odds of the CLARITY Act being signed into law in 2026 sliding noticeably from earlier this year, even though the bill cleared the House in July 2025 by a 294-134 margin. The legislation has been stuck in the Senate Banking Committee for months, caught in a fight between the banking lobby and the crypto industry over the treatment of stablecoin yield. As BNC reported in March, even President Trump’s increasingly public pressure on the banks has failed to break the impasse, and Senate Banking Chair Tim Scott’s optimistic line that the bill becomes law before the midterms is starting to look generous.

That matters because much of the institutional thesis for higher Bitcoin prices in 2026 leaned on CLARITY passing. JPMorgan analysts argued earlier this year that the bill, if enacted, could move pension funds, insurers and asset managers from exploratory crypto allocations into “high-conviction positions.” Without it, the marginal trillion-dollar allocator stays on the sidelines, and the bid that was supposed to absorb new ETF supply through the back half of the year keeps thinning out.

The third headwind arrived from an unexpected direction this week. The Nasdaq 100 fell 1% on Tuesday after a Wall Street Journal report that OpenAI had missed its 2025 sales and user targets, taking down Nvidia, Oracle and CoreWeave in the process. Bitcoin’s correlation with the AI complex has been one of the durable macro features of this cycle, and the asset moved with it. Apple, Amazon, Google, Meta and Microsoft earnings will dictate whether this is a single bad data point or the beginning of a broader rerating in AI capex assumptions — a question crypto traders now have to care about whether they want to or not.

About that $250K target

Against this backdrop, the year-end calls from Tom Lee at Fundstrat and venture investor Tim Draper for Bitcoin at $250,000 require a rally of more than 230% in roughly eight months. Veteran chart watchers are increasingly skeptical. Peter Brandt, the futures trader who has spent years calling Bitcoin tops and bottoms, posted a daily chart this week showing what he describes as a maturing bear flag, with resistance near $79,500 and the lower boundary around $69,000. “Those of you predicting $250,000 in 2026 need to stop with the mushrooms,” he wrote, arguing the channel structure is explicitly not a bullish bottoming pattern. A clean break below the lower boundary, on his framework, opens a path toward sub-$50,000.

“Those of you predicting $250,000 in 2026 need to stop with the mushrooms” said Brandt via X

The halving cycle map points the same direction. BTC has historically peaked 12 to 18 months after each halving, and the April 2024 halving fits neatly: the all-time high near $126,000 arrived in October 2025, roughly 17 months later. Trading 24 months past the halving and 40% below that high looks much more like the post-peak phase of a familiar cycle than the launchpad for a third leg up. Add the “sell in May” pattern that has clipped Bitcoin in every US midterm year since 2014 — drawdowns of 61%, 65% and 66% in 2014, 2018 and 2022 respectively — and the seasonal calendar is hostile to the bull case.

A more sober consensus is emerging. Bernstein continues to model a 2026 range that tops out closer to $100,000–$150,000, a path that would still deliver double-digit returns for buyers at current prices but bears no resemblance to the supercycle narrative. BNC’s own aggregation of analyst forecasts produced a $201,000 median 2026 target back in October, and even that figure looks aspirational with the asset under $76,000 in late April.

A Warsh-shaped wildcard

The one variable that could yet rewire this picture is sitting in the Senate Banking Committee, where Kevin Warsh’s nomination to succeed Powell advanced 13-11 along party lines on Wednesday. Warsh, whose recent disclosures showed personal exposure to Solana and Polymarket, has spent the last year explicitly arguing for rate cuts — in line with what the President has been demanding from Powell for most of his second term. Powell himself, in his closing remarks at his probable last press conference, told reporters this would be “a very normal, standard kind of a transition process,” and signaled he intends to remain on the Fed Board as a governor through the rest of his term.

Whether that transition translates into actual easing depends on oil, on Hormuz, and on whether AI capex holds up well enough that the inflation impulse from energy doesn’t feed into a second-round wage problem. None of those variables are improving today. By the time they do, the chart Brandt is staring at may have already resolved.

For now, Powell’s final pause looks less like a polite handover than a slow puncture. The ETF flows, the regulatory tailwind, the macro pivot — all the ingredients that were supposed to power Bitcoin to a third of a million dollars by Christmas — are missing or actively running the other way. The $250K thesis is not dead. It just needs a great deal to go right, very quickly, in a year where the Fed has just told the market it has no interest in rushing.