Bitcoin surged significantly to $116,250, rising over 24% in three hours, briefly boosting sentiment across the cryptocurrency market. Despite a cautious stance from traditional markets, traders continue to weigh the Fed's rate outlook, yet this move occurred.

This rebound highlights the resilience of cryptocurrencies and their ability to attract capital flows even in times of macro uncertainty.

Powell's Jackson Hole Message

At Jackson Hole, Fed Chair Jerome Powell acknowledged progress in cooling inflation but avoided committing to an aggressive rate-cut path. He hinted that a 25 basis point cut in September is 'very likely,' the clearest sign of recent easing policy.

However, Powell warned against expecting a series of rapid rate cuts. He emphasized the Fed's 'data-dependent' stance, pointing out risks from tariff-driven inflation and keeping the door open for maintaining higher rates for longer if necessary.

A mixed tone has spread across the market. U.S. stocks have given back early gains, with cryptocurrencies reflecting volatility, causing traders to oscillate between optimism over easing inflation and concerns that liquidity may remain tight until year-end.

FedWatch Tool Reaction

CME FedWatch Tool currently indicates an 87.3% chance of a rate cut to 400-425 basis points at the September 17 meeting, while the probability of stabilizing at 425-450 basis points is only 12.7%. The market largely views this as confirmation of easing policy, although Powell's warnings keep risk sentiment restrained.

Cryptocurrency Market Reaction

Despite Powell's restraint, major digital assets are holding firm. Bitcoin is trading at $116,269, up 3.28% over the past 24 hours, with a market cap of $2.31 trillion. Ethereum has risen 12.3% this week to $4,749, showing new momentum ahead of the network upgrade. XRP climbed to $3.04, while Solana surged 7.48% to $194.80 in the last day, reflecting strong demand for high-performance chains.

This resilience underscores how cryptocurrencies are now closely tied to shifts in global monetary policy. Investors are weighing whether Powell's hesitation has delayed new capital inflows or whether the easing of inflation has created space for a mid-term rebound in digital assets.

Bitcoin Technical Outlook

Technically, Bitcoin is facing a challenge in the $116,500 to $118,000 range, with sellers limiting recent rebounds. A breakout above $118,500

On the downside, $112,000 is a key support level to watch. A close below this threshold could lead to further retracement to $108,000.

50-Day Moving Average: Trending upwards, supporting bullish momentum.

RSI (Daily): Positioned around 54, leaving room for further upside.

MACD: Indicates that bearish pressure is easing, but a breakout requires confirmation by volume.

Broader Implications

Cryptocurrency investors are increasingly aligning their strategies with the Fed's communications. While Powell's speech did not commit to imminent rate cuts, the acknowledgment of cooling inflation provides Bitcoin and Ethereum with room to consolidate above key support levels. If Q4 economic data confirms slowing inflation and weak growth, cryptocurrencies may benefit as capital seeks alternative hedges.

Currently, the market remains data-driven: Strong U.S. inflation data would put pressure on Bitcoin below $112, while weak data could pave the way for a return to $130.

Summary: Powell's cautious tone at Jackson Hole has weakened hopes for rapid rate cuts, but the cryptocurrency market remains resilient. Bitcoin's outlook depends on defending the support level at $112 and breaking through the resistance level at $118.5 to confirm a push towards $130.