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Bitcoin has encountered significant challenges in recent months despite reaching a new all-time high in May. The cryptocurrency market's turbulence is compounded by increasing apprehensions surrounding a $37 trillion "ticking time bomb." Notably, Bitcoin's value surged following Donald Trump's victory in the November election but has since struggled to maintain momentum due to ongoing economic uncertainties.

As the Federal Reserve contends with a potentially "cataclysmic" crisis threatening the U.S. dollar, the crypto market is on edge. Elon Musk, Tesla's CEO, has quietly supported warnings of a dollar collapse. Meanwhile, Trump has announced that a decision concerning the next Federal Reserve chair will be revealed soon, stirring anticipation in the crypto market.

In comments captured by Reuters, Trump confirmed aboard Air Force One that an announcement regarding the Fed's new chair is imminent. Trump criticized current Fed Chair Jerome Powell and reiterated his call for immediate interest rate cuts to combat potential inflation. Despite Trump's urging, the Federal Reserve is largely expected to keep rates steady in its upcoming June and July meetings, with uncertainty shrouding their decisions for September.

Former Fed governor Kevin Warsh has emerged as a frontrunner in the race for the Fed chair position, particularly on the crypto prediction platform Polymarket. Warsh has suggested that lowering interest rates could be feasible if the Fed reduced its balance sheet, an opinion he shared at Stanford University's Hoover Institution last month.

Analysts at the Bitfinex exchange suggest that a rate cut would be favorable for risk assets like Bitcoin. They predict that if Bitcoin can maintain support above $105,000, it could aim for a range between $120,000 and $125,000 in June, driven by various catalysts, including potential Fed actions.

In the backdrop, Trump has again pressed for rate cuts, a stance fueled by his administration's view that global trade tariffs will drive up inflation. Despite his threats earlier in the year, Trump has confirmed he will not attempt to remove Powell before the end of his term next year.

The forthcoming U.S. consumer price index (CPI) inflation data is anticipated to show a rise in prices after relative stability in early 2025. This, combined with stronger-than-expected jobs data, has kept Powell in the spotlight for criticism from the Trump administration, even as the White House continues to back its tariff policies aimed at benefiting Main Street over Wall Street.