The cryptocurrency market is heating up again thanks to signals of interest rate cuts from U.S. Federal Reserve Chairman Jerome Powell.
Powell's speech at the Jackson Hole event boosted Bitcoin, Ethereum, and market sentiment shifted to a greedy state, opening up positive prospects for September.
MAIN CONTENT
The Fear & Greed Index returned to the greedy zone with a score of 60, indicating strong confidence.
Views within the Fed are still divided, and there is no consensus on rate cuts.
Bitcoin and Ethereum breakout, leading the recovery of the cryptocurrency market.
How did the Fear & Greed Index return to the 'greedy' zone?
The Fear & Greed Index for cryptocurrencies rose to 60 points on Saturday, from a level of 50 the day before, reflecting a quick recovery of positive sentiment as the Fed hinted at a more accommodative monetary policy.
Previously, this index had fallen into the 'fear' zone, indicating the market's high sensitivity to macro information. Rate cuts will help reduce borrowing costs, increase liquidity, and make risky assets like cryptocurrencies more attractive compared to bank deposits.
Currently, about 75% of traders according to CME's FedWatch Tool predict that the Fed will cut interest rates at the September meeting, raising expectations for a major policy shift.
Why are views within the Fed still diverse?
Some Fed leaders, such as St. Louis Fed Chairman Alberto Musalem, still do not support rate cuts and want more time to evaluate.
Nevertheless, many cryptocurrency investors have prepared for a price surge following what is considered Powell's 'dovish' speech, a forecast shared by veteran traders.
"The market reflects a tightening monetary stance, and speculation about a rate cut in September is no longer certain. If Powell does not mention a cut, the market will be under pressure."
– Jason Ai. Williams, Cryptocurrency Trader, August 2025
This indicates the caution and flexible response of the market to unclear policy signals.
How did Bitcoin and Ethereum lead the recovery?
Following signals from the Fed, Bitcoin quickly rose 5% to $117,000, while nearly $400 million in short positions were liquidated. Ethereum was even stronger, rising 2% in 24 hours, challenging the historic peak of 2021 near $4,870.
As the September Fed meeting approaches, cryptocurrency traders will closely monitor every signal as the Fed's decision could guide the market for the rest of the year.
Frequently Asked Questions
What is the Fear & Greed Index in cryptocurrency?
This is a measure of market sentiment, reflecting the fear or greed of investors based on indicators like price volatility and trading volume.
Why do interest rate cut signals affect cryptocurrency prices?
Rate cuts make borrowing cheaper, increase market liquidity, and make risky assets like cryptocurrencies more attractive compared to bank deposits.
How does the Fed's lack of consensus affect the cryptocurrency market?
Divergent views create instability and volatility, but at the same time, it also offers opportunities for investors to seize new chances as decisions become clearer.
How do Bitcoin and Ethereum react to signals from the Fed?
These two coins often lead the trend when they rise sharply due to high liquidity and the interest of numerous investors.
What should investors pay attention to as the Fed meets in September?
Investors should closely monitor each statement and policy outlook as changes will directly affect sentiment and trends in the cryptocurrency market.
Source: https://tintucbitcoin.com/chi-so-crypto-tang-manh-sau-powell/
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