Crypto rise was propelled by US Federal Reserve Chair Jerome Powell’s strong signal for Fed rate cuts during his Jackson Hole speech on Friday. Following the recent FOMC Minutes release, Powell stated, “The time has come for policy to adjust,” which significantly boosted positive sentiment in both stock and crypto markets.
Bitcoin experienced a notable crypto rise, hitting an intraday high of $62,320 after Powell’s dovish comments hinted at potential rate cuts beginning in September. Ethereum also saw a brief spike, reaching $2,700 before quickly retreating to $2,680, showcasing the volatility often seen in the crypto rise.
The impact of Powell’s remarks underscores the growing influence of macroeconomic factors on cryptocurrency prices. As the market digests the possibility of future rate cuts, expectations remain high for continued momentum in the crypto space, which could lead to further opportunities for growth in Bitcoin, Ethereum, and other digital assets.
Jerome Powell Gives Strongest Fed Rate Cuts Signal
During the Jackson Hole Symposium in Wyoming, US Federal Reserve Chair Jerome Powell indicated that the central bank is considering interest rate cuts in the near future. While he did not specify exact timing or the extent of these cuts, Powell affirmed that it is time for a monetary policy pivot due to slowing inflation and a weakening labor market in the United States.
In his prepared remarks at the central bank’s annual gathering in Grand Teton National Park, Powell emphasized, “We do not seek or welcome further cooling in labor market conditions.” He also stated, “The time has come for policy to adjust.” His remarks set the stage for a shift in monetary policy that could have significant implications for various asset classes, including cryptocurrencies.
The Fed Chair clarified that the timing and pace of any potential rate cuts would rely on incoming data, the evolving outlook, and the balance of risks. Despite these uncertainties, his speech confirmed market expectations for a rate cut in September, which led to rallies in stocks, bonds, and notably, Bitcoin. This anticipated shift contributed to a crypto rise, as investors looked to capitalize on the potential for increased liquidity and lower borrowing costs.
According to the CME FedWatch tool, there is a 67.5% probability of a 25 basis point rate cut in September, which is a decrease from 76% the day before. Nevertheless, the market is still anticipating a total of 100 basis points in rate cuts by the Fed this year, which could provide further support for a crypto rise. The US Treasury yields and the US dollar index (DXY) recently fell to a 14-month low, creating a bullish environment for Bitcoin and other digital assets.
The potential for rate cuts aligns with historical trends, where lower interest rates have often fueled a crypto rise. As investors seek alternative assets, Bitcoin tends to benefit from increased demand, especially during times of monetary easing. This outlook has fostered a renewed sense of optimism within the crypto community, leading to discussions about Bitcoin’s role as a hedge against inflation and currency devaluation.
In summary, Powell’s remarks have laid the groundwork for possible future rate cuts, igniting a crypto rise that reflects broader market dynamics. As the situation evolves, investors will be closely monitoring economic indicators that could shape the Fed’s decisions and, consequently, influence the trajectory of cryptocurrencies like Bitcoin.
Bitcoin And Ethereum Performance
Analysts at Bank of America Securities have pointed out that the S&P 500 has historically shown a limited reaction to the Jackson Hole meeting. This suggests that even if Federal Reserve Chair Jerome Powell adopts a dovish stance during his speech, it may not significantly influence the overall market dynamics. Given the current economic climate, investors are closely watching how these developments unfold.
Benjamin Cowen, an analyst known for his insights into cryptocurrency, highlighted the price action of Ethereum (ETH) against Bitcoin (BTC) in 2016, 2020, and the projected movements for 2024. Cowen noted that in both 2016 and 2019, Ethereum experienced substantial rallies in September, peaking on September 20 and September 19, respectively. He believes that, similar to past trends, prices might dip following the Fed’s initial rate cuts but eventually initiate a crypto rise in the following months.
In the meantime, Bitcoin has experienced notable volatility as traders recalibrate their positions in response to market signals. The BTC price has seen a 2% increase within an hour and has risen nearly 3% over the past 24 hours, currently trading at approximately $61,700. This increase in Bitcoin’s price can be attributed to heightened trading activity, with trading volume significantly increasing in the last hour, indicating a resurgence of interest among traders.
Ethereum, not to be outdone, has also shown positive price movement, climbing over 2% in the past 24 hours. The current price of ETH stands at $2,666, with trading fluctuations reflecting a 24-hour low of $2,592 and a high of $2,700. The slight uptick in trading volume further supports the idea that interest in Ethereum is on the rise, contributing to the overall positive sentiment in the crypto market.
As traders adjust their strategies in anticipation of further developments from the Federal Reserve, the potential for a crypto rise remains a focal point. The dynamic nature of cryptocurrency trading, characterized by rapid price movements and fluctuating volumes, reflects broader market sentiments and speculative behaviors among investors.
In summary, while traditional markets may react minimally to Powell’s address, the crypto landscape appears more responsive, with Bitcoin and Ethereum both showing signs of a crypto rise amid shifting economic conditions. This scenario underscores the importance of monitoring market trends and adjusting investment strategies accordingly, particularly in the ever-evolving world of cryptocurrency.
