Crypto Market Flips Back to Greed as Bitcoin and Ether Rally on Powell’s Comments
Ethereum hits 2021 highs while BTC jumps past $117K on renewed rate cut speculation
Crypto sentiment surged back into “Greed” territory over the weekend after Federal Reserve chair Jerome Powell signaled that current economic conditions could justify a shift in monetary policy. The Crypto Fear & Greed Index climbed to 60 on Saturday, up from 50 the previous day, marking a sharp rebound from earlier dips into Fear.
The rally followed Powell’s speech at the annual Jackson Hole symposium, where he suggested that inflation and labor market data “may warrant adjusting” the Fed’s policy stance. The dovish tone fueled renewed optimism across digital asset markets.
Ether Emerges as Key Beneficiary of Fed Outlook
Bitcoin spiked 5% to $117,300, triggering nearly $380 million in short liquidations, while Ether rallied 11.5% to touch $4,851 – just shy of its 2021 record. Axie Infinity co-founder Jeffrey “Jiho” Zirlin described ETH as the “most rate-sensitive aspect of crypto,” pointing out that lower interest rates widen the yield gap between decentralized finance and traditional banks.
Market data from the CME FedWatch Tool shows 75% of traders now expect a 25 basis point cut at the Fed’s September 17 meeting. Analysts argue that such a move would boost liquidity, making risk assets like cryptocurrencies more attractive.
Traders Had Anticipated Powell-Driven Rally
Despite the optimism, St. Louis Fed President Alberto Musalem told Reuters that he has not yet committed to supporting a rate cut, noting he will finalize his view closer to the decision date.
Still, some traders had already positioned for a Powell-fueled breakout. Jason Williams predicted a “turbo rip” if the Fed chair hinted at easing, while Ran Neuner of Crypto Banter said ahead of the event that “Jackson Hole will shape crypto’s direction moving forward.”
With markets now pricing in easing, sentiment has clearly turned bullish – but whether Powell follows through in September will determine if the rally has legs.
