Ethereum just hit a new peak above $4,878, surpassing the highest level since 2021 thanks to expectations of an interest rate cut by the FED in September.
The strong growth of ETH in 2025, surpassing Bitcoin, marks the beginning of the altcoin season. The statement by FED Chairman Jerome Powell at the Jackson Hole conference contributed to pushing the cryptocurrency market higher.
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Powell's statement at Jackson Hole raises the probability of a FED rate cut to nearly 90%.
The anticipated rate cut is expected to boost liquidity, stimulating a long-term bullish cycle for Ethereum and altcoins.
Ethereum is trending towards surpassing $5,000, but investors need to be patient and wait for a correction to increase their positions.
How does Powell's statement affect the market?
FED Chairman Jerome Powell affirmed that U.S. employment data has been revised down for three consecutive months, while assessing that the risks of inflation and unemployment are currently balanced. This increases the probability of an interest rate cut from 71% to nearly 90%, according to the market's quick reaction.
Ethereum immediately surged to a new high of $4,878, while Bitcoin and other altcoins like Solana, XRP, and Cardano also saw positive momentum. This reaction shows investors' sensitivity to softer signals from the FED.
This move marks an important transition from a steadfast inflation control viewpoint to the possibility of loosening monetary policy, paving the way for new capital flows into the cryptocurrency market.
Will the FED cut interest rates significantly in September?
While the likelihood of an interest rate cut in September is very high, Powell simultaneously dismissed expectations of a rapid and strong rate cut. The FED is shifting from a 'flexible' policy that allowed inflation to exceed the target to a clearer commitment to the 2% target.
This means that a rate cut is expected, but there will not be many consecutive cuts. Investors should prepare for caution and not expect a liquidity explosion in the near term.
These cautious steps help the FED avoid the risk of inflation returning while still supporting economic growth.
Could increased liquidity trigger an altcoin season?
Just one rate cut along with the possibility of a pause in the FED's balance sheet reduction could create a large cash flow for the cryptocurrency market, driving a prolonged bullish trend for Ethereum and leading altcoins.
Technical analysis shows that Ethereum is far outperforming Bitcoin in momentum strength, with BTC's dominance ratio declining, while altcoins like Solana, XRP, and Cardano show stable growth. This is a clear signal of an altcoin season forming.
Nate Geraci from NovaDius Wealth notes that while Bitcoin still plays the role of 'digital gold', Ethereum and altcoins are attracting a large number of mainstream investors thanks to their role as a financial foundation and future technology applications.
Can Ethereum reach a price of $5,000?
The cryptocurrency analyst said his investment allocation is leaning heavily towards altcoins, with 80% of his portfolio for Ethereum and other major coins, keeping only 20% for Bitcoin. His trading bots have effectively locked in profits on ETH, SOL, LINK, and XLM while still expecting growth for ADA.
Forecasts suggest that Ethereum still has room to break through the $5,000 mark, but based on experience, a correction after reaching a peak is normal. He prefers to wait for a drop to the $4,000 range to increase his position, emphasizing that patience in a rapidly growing market is a decisive factor.
The 'Fed is opening the door to a looser monetary policy but will not implement rapid and strong cuts. This creates opportunities for the cryptocurrency market to cautiously and sustainably leverage new capital flows.'
– VirtualBacon, Cryptocurrency Analyst, 2025
Frequently Asked Questions
What does Powell's statement mean for Ethereum?
Powell's statement raises expectations for a FED rate cut, helping Ethereum quickly establish a new peak and attract capital inflows.
Why isn’t the FED cutting interest rates significantly right now?
To maintain the goal of controlling inflation at 2%, the FED chooses to cut interest rates cautiously to avoid the risk of accelerating inflation returning.
How can increased liquidity promote an altseason?
New capital flows from the FED's loosening policy create conditions for altcoins to break out as Ethereum and major coins dominate the market.
Could Ethereum reach a price above $5,000 in 2025?
Ethereum has the potential to surpass this mark, but investors need to be patient and wait for a correction to increase sensible investments.
How should investment be allocated in the current market?
Many experts recommend increasing the allocation to altcoins and keeping Bitcoin low to take advantage of the rapid growth opportunities of Ethereum and major altcoins.
Source: https://tintucbitcoin.com/ethereum-but-pha-nho-tin-hieu-powell/
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