Bitcoin News Today: Bitcoin's Bull Run Is Now Driven by Fed Signals, Not Code

The interplay between global liquidity and cryptocurrency markets is reshaping the dynamics of risk asset performance, with Bitcoin and other digital assets increasingly aligning with broader macroeconomic signals. Recent developments highlight how central bank messaging, particularly from the U.S. Federal Reserve, has emerged as a primary catalyst for price movements in the cryptocurrency space.

In August 2025, Federal Reserve Chair Jerome Powell's comments at the Jackson Hole symposium hinted at potential policy adjustments, triggering a sharp upward movement in Bitcoin and Ethereum prices. Bitcoin surged past $117,000, while Ethereum approached $4,900, illustrating the growing influence of macroeconomic liquidity signals over traditional on-chain metrics [2]. This shift underscores a structural evolution in the crypto market, where global monetary conditions are now as pivotal as technological advancements or network activity.

One of the most significant implications of this alignment is the increased volatility tied to liquidity cycles. Cracked Labs observed that all-time highs in digital assets are not just bullish indicators but also points of fragility, marked by emotional instability and sharp sentiment swings [2]. For instance, while Bitcoin and Ethereum have surged on the back of macro liquidity, altcoins such as Solana and Chainlink have shown varied responses. Solana-based tokens remain under pressure due to weak fundamentals despite some price gains, whereas Chainlink has benefited from increased network usage and whale activity [2].

This divergence highlights a critical lesson for investors: liquidity can spark rallies, but sustained success requires robust fundamentals. Cracked Labs emphasized the importance of projects rewarding long-term contributors, managing treasury deployment around liquidity cycles, and prioritizing utility over hype. This dynamic becomes especially relevant as the market matures, with liquidity increasingly acting as gasoline rather than the sole driver of growth.

Looking ahead, analysts are tracking Bitcoin’s trajectory toward another potential all-time high in late 2025. According to Egrag Crypto, the bull cycle is following a pattern of decelerating growth rates, with peak growth estimated at 27% by December 2025 [3]. While the rate of growth is slowing, the extended duration of the current cycle suggests that the bull market may persist into early 2026. Arab Chain of CryptoQuant further noted that Bitcoin’s illiquid supply has returned to historically high levels, reducing sell-side availability and creating upward pressure [3]. However, this fragile bull run could also lead to sharp corrections if large holders suddenly release their holdings into a thin market.

The implications for global risk assets are equally significant. As Bitcoin and other cryptocurrencies increasingly mirror global liquidity conditions, their performance is no longer isolated from traditional financial markets. The rise of Bitcoin ETFs and favorable regulatory environments has contributed to a more stable market environment, potentially allowing for prolonged sideways or upward trends rather than abrupt corrections [1]. This could mark a departure from the historically cyclical boom-and-bust patterns tied to Bitcoin’s halving events.

While the path forward remains uncertain, the alignment of digital asset markets with global liquidity cycles is reshaping investment strategies. Investors must now factor in central bank signals, liquidity conditions, and macroeconomic trends when assessing the performance potential of cryptocurrencies. As the market continues to mature, the balance between liquidity-driven momentum and fundamental strength will likely determine which assets thrive and which falter in the evolving crypto landscape.

Source:

[1] Is Cryptocurrency Liquidity Shifting From Bitcoin to Altcoins? (https://www.fool.com/investing/2025/08/28/is-cryptocurrency-liquidity-shifting-from-bitcoin/)

[2] Fixed Income News | Fidelity Investments (https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202508281047BENZINGAFULLNGTH47388921)

[3] Here's When Bitcoin's Next All-Time High May Come: BTC ... (https://cryptopotato.com/heres-when-bitcoins-next-all-time-high-may-come-btc-price-forecast/)