Bitcoin continues its upward momentum following the latest Federal Reserve monetary policy meeting and Jerome Powell's press conference, in which he briefly touched on cryptocurrency regulation.

The flagship crypto has already gained 3.5%, reaching $105,300, while smaller tokens such as Ether and Solana have also posted notable gains.

On Wednesday, Fed policymakers paused monetary easing. Jerome Powell, during his traditional briefing, made it clear that the central bank needs to see more progress in the fight against inflation before considering further interest rate cuts. In response to a question about the risks associated with digital assets, the Fed's Chairman stated that banks are fully capable of serving crypto clients as long as they understand and manage the risks effectively. He also added that stronger regulatory oversight from Congress regarding cryptocurrencies would be highly constructive.

Powell further emphasized that it is crucial for financial institutions to enhance their risk management capabilities in the crypto sector. This would not only attract new clients but also ensure financial stability amid the growing popularity of digital assets. He stressed that additional regulatory measures could help establish clear rules for all market participants, fostering transparency and trust, which, in turn, would support greater adoption of cryptocurrencies within the traditional financial system.

These comments mark the first time the Federal Reserve has issued such comments, as the central bank has historically maintained a negative stance toward digital assets. Although Powell's remarks were measured and cautious, they coincided with growing investor expectations for a more crypto-friendly regulatory environment under President Donald Trump, who has openly supported the cryptocurrency sector.

No wonder, US traders reacted positively to Powell's comments, pushing Bitcoin higher. From a broader technical perspective, signs indicate that Bitcoin's rally is gaining strength.

Importantly, Bitcoin hit a record high of $109,241 ahead of Trump's inauguration on January 20 before retreating. Since Trump's election victory in early November, Bitcoin has surged over 50%, leading some analysts to question whether the rally needs a breather.

Other market participants argue that greater US engagement with crypto signals further growth opportunities. Investment firms are also flooding the Securities and Exchange Commission with proposals for launching more cryptocurrency exchange-traded funds (ETFs).

However, Bitcoin's recent price movements have increasingly correlated with US tech stocks, which recently experienced a sharp sell-off. This has led some investors and traders to question whether a bubble is forming in the fintech sector.

Bitcoin technical outlook

Buyers are now targeting a return to $106,000, which could pave the way for $107,500, followed by $109,000. The long-term target remains $110,400—a breakout above this level would signal a return to a mid-term bullish market.

In case of a Bitcoin correction, support is expected at $104,400. A drop below this level could quickly drag BTC down to $102,900, with further downside potential toward $101,200. The ultimate bearish target would be $99,500.

Ethereum technical outlook

For Ethereum, a clear consolidation above $3,220 would open the door for a push toward $3,264, followed by $3,314. The long-term target remains $3,373—a breakout above this level would confirm a return to a mid-term bullish market.

In case of an ETH correction, buyers are expected to step in at $3,161. A move below this level could quickly push ETH down to $3,106, with a final bearish target at $3,056.