Written by: 1912212.eth, Foresight News
Powell's speech on the evening of August 22 finally injected a shot of adrenaline into the precarious crypto market. At the Jackson Hole annual meeting, Powell stated that changes in the risk balance may require policy adjustments, indicating that the risks of employment downturn are increasing. The market understands that Powell seems to be preparing for a rate cut in September.
In response to this positive news, BTC quickly reclaimed the $112,000 mark, rising 2.95% in one hour, at one point climbing above $117,000. ETH's performance was even more impressive, surging from around $4,200 and finally reaching a historical high of $4,887.59 around 5 AM on August 23. The ETH/BTC exchange rate rose to 0.0418, setting a new high since October 2024. Many altcoins benefited from the market surge, experiencing a strong rebound.
In terms of contract data, Coinglass shows that over the past 24 hours, the total liquidations across the network exceeded $694 million, with over $468 million in short liquidations.
Powell's softened stance leads to market expectations of two rate cuts within the year.
Before Powell's speech, the market's pessimistic expectations may have shifted hawkishly, and some traders chose to stay on the sidelines, leading to a significant drop in the crypto market ahead of the conference.
Surprisingly, Powell's significant speech this time suggests that the current situation indicates an increase in downside risks for employment. This change in risk balance may imply the need for rate cuts.
Powell mentioned that stable labor market indicators like unemployment rates allow the Fed to cautiously consider adjusting its monetary policy stance, opening the door for a rate cut in September.
According to CME's 'FedWatch' data, the probability of a rate cut by the Federal Reserve in September rose to 91.2% after Powell's speech.
(Wall Street Journal) Noted journalist, known as the 'Fed's megaphone,' Nick Timiraos reported that Fed Chairman Powell opened the door for a potential rate cut as early as next month's meeting, stating that the job market may face a more severe slowdown, which could alleviate concerns about rising inflation due to tariffs causing cost increases. However, Powell's remarks emphasized concerns about inflation, calming market expectations for consecutive aggressive rate cuts by the Federal Reserve. Inflation has been above the Fed's 2% target for over four years.
Deutsche Bank expects the Federal Reserve to cut rates by 25 basis points in September and December, whereas previously the bank predicted that the Fed would only cut rates in December 2025.
Nationwide Chief Economist Kathy Bostjancic stated that the Federal Reserve will cumulatively cut rates by 75 basis points by the end of the year. She noted, 'Powell has adopted a noticeably more dovish tone and significantly opened the door for a rate cut in September, as he believes the risks of employment downturn are significantly increasing. This supports our judgment of a 25 basis point rate cut next month, and we continue to expect the Fed to cumulatively cut rates by 75 basis points by the end of the year, as the labor market is expected to weaken further, while inflation rises only moderately and temporarily.'
According to The Kobeissi Letter's analysis of Fed Chairman Powell's speech today: 'Today's speech indicates that their (the Federal Reserve's) top priority has shifted to supporting the labor market. Changes in risk balance may require policy adjustments, which he clearly referred to in terms of the labor market. Therefore, employment reports will determine future rate cuts.
The Federal Reserve's next interest rate decision will be announced at 2 AM Beijing time on September 18.
Ethereum spot ETF and stablecoin data performance optimistic
As one of the important indicators for monitoring market capital flows, the data for Bitcoin's spot ETF is not optimistic, showing significant net outflows in recent days, reflecting strong market risk aversion.
However, the Ethereum spot ETF saw a net inflow of $287.61 million on August 21 after four consecutive days of net outflow. The total net inflow currently stands at $12.09 billion. It is evident that the market may be betting on Ethereum for higher returns.
Stablecoin data continues to pour in.
According to defiLlama data, the current total market cap of stablecoins is $277.74 billion, with a total increase of 0.96% over seven days, amounting to $2.645 billion. Among them, USDT's monthly increase is 2.6%, USDC's is 4.63%, and USDe's is 80.87%.
Additionally, the popular project WLFI token will begin trading and its first claim on September 1 at 20:00, where 20% of early supporters' shares can be claimed simultaneously, and it will be listed on DeFi DEX and major CEX. As a DeFi project supported by the Trump family, WLFI carries a political halo, and its token trading launch may attract a lot of politically inclined investors interested in cryptocurrency, especially domestic users in the U.S., contributing to short-term market uplift and liquidity injection.
Market View
Former Goldman Sachs executive and founder of macro research firm Real Vision, Raoul Pal, released a technical analysis suggesting that Total3 (altcoins excluding BTC and ETH) is about to reach a turning point.
Data analysis firm Altcoin Vector analyzed that as ETH provides upward momentum and a ripple effect for other tokens, once ETH stabilizes above its historical high, altcoins may experience a full-blown surge.
Weiss Crypto analyst Juan stated that altcoins will only experience a frenzy after ETH breaks above $5,000, with the peak of this round of increases possibly occurring between September 13 and 20, with the latter being more likely. Before that, the overall market is expected to show an upward trend.
Click to learn about job openings at ChainCatcher
Recommended Reading:
Interview with Wall Street guru Tom Lee: Corporate treasury models outperform traditional ETFs, Ethereum is poised for Bitcoin-like explosive growth
Interview with Oppenheimer Executive Director: Coinbase's Q2 trading revenue fell short of expectations; which businesses will become new growth points?
Backroom: Tokenization of Information, a solution to data clutter in the AI era?| CryptoSeed
