Bitcoin News Today: Crypto sentiment returns to Greed as Bitcoin and Ether spike on Fed speech

Crypto sentiment shifted back to "Greed" as Bitcoin (BTC) and Ethereum (ETH) surged following Federal Reserve Chair Jerome Powell’s comments at the Jackson Hole Economic Symposium, which hinted at a potential rate cut in September. The Crypto Fear & Greed Index, which had earlier in the week dipped into "Fear," rose to 60 on Saturday—marking a "Greed" reading and a 10-point increase from Friday’s neutral 50 [1].

The price of Bitcoin jumped approximately 5% to $117,300, liquidating over $379 million in short positions. Ether, meanwhile, reached as high as $4,851—a near 11.51% increase over 24 hours and close to its 2021 all-time high of $4,878 [1]. Axie Infinity co-founder Jeffrey “Jiho” Zirlin highlighted ETH's sensitivity to interest rates, noting that lower rates could make DeFi returns more attractive compared to traditional banking deposits [1].

According to the CME FedWatch Tool, 75% of market participants expect a rate cut at the Fed’s September 17 meeting. The Kobeissi Letter also suggested that Powell may be laying the groundwork for such a move [1]. Historically, Fed rate cuts have boosted liquidity and increased the appeal of riskier assets like cryptocurrencies [1].

Despite this bullish reaction, Fed officials remain divided. St. Louis Fed President Alberto Musalem stated he needs more time to decide on a potential cut, emphasizing that his decision would depend on the data and market conditions closer to the meeting [1]. Prior to the speech, several market participants predicted a strong crypto reaction if Powell hinted at a rate cut. Author Jason Williams suggested a dovish stance could trigger a "turbo rip," while trader Ran Neuner argued that Jackson Hole could shape crypto’s future [1].

The crypto market’s response highlights its continued sensitivity to macroeconomic signals. With the Fed signaling potential easing, investors are increasingly viewing crypto as a high-return asset class. However, the market remains subject to rapid shifts, particularly in the lead-up to major central bank announcements [1].

[1] Source: [1] title: Crypto sentiment returns to Greed as Bitcoin and Ether spike on Fed speech (url: https://cointelegraph.com/news/crypto-market-greed-bitcoin-ether-price-rally-federal-reserve-dovish)