Bitcoin News Today: Bitcoin's Rally Hinged on Fed Signals and Investor Bets

Bitcoin (BTC-USD) surged past $117,000 on Friday, marking a significant rebound from a six-week low of $111,658, as the U.S. Federal Reserve hinted at a potential interest rate cut during Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium. The event, an annual gathering of central bankers and policymakers, is traditionally seen as a pivotal moment for shaping financial market expectations. This year’s speech, which emphasized the potential for monetary policy adjustments amid inflation and labor market concerns, sparked optimism among investors and pushed Bitcoin higher by over 3% within minutes of the announcement [2].

The price movement came as traders awaited signals of a more dovish stance from the Fed, which could support risk assets like Bitcoin. Powell’s comments appeared to “set the stage” for a September rate cut, with CME Group’s FedWatch Tool indicating a 73% probability of a 25-basis-point reduction, down from 92% the week prior [5]. This shift in sentiment led to immediate gains for Bitcoin, Ethereum (ETH-USD), and other major tokens, with Solana (SOL-USD) and Dogecoin (DOGE-GBP) rising by 4% each [1]. In contrast, the U.S. dollar weakened, reflecting broader market confidence in accommodative monetary policy [2].

The cryptocurrency market’s response to Powell’s speech underscored its increasing sensitivity to macroeconomic developments. With over $13.8 billion in Bitcoin options set to expire on August 29, the price action ahead of the Jackson Hole event became particularly critical. Traders and analysts closely watched the $114,000 level, which marked a key psychological and technical threshold for the ongoing bull or bear trend [3]. The open interest data revealed a bearish bias, with more funds allocated to put (sell) options than call (buy) contracts, suggesting continued downward pressure if Bitcoin failed to sustain a breakout above $116,000 [3].

At the same time, the broader cryptocurrency ecosystem was witnessing innovation in tokenisation, with SkyBridge Capital planning to tokenize two of its hedge funds. The move aimed to expand access to traditionally exclusive investment products, potentially attracting new capital to the sector [1]. On the institutional front, the demand for spot Bitcoin exchange-traded funds (ETFs) continued to drive inflows, despite recent outflows totaling $1.17 billion over five trading days. Crypto entrepreneur Anthony Pompliano argued that Bitcoin was now oversold and positioned for a rebound, particularly as investor activity tends to intensify in the latter half of the year [4].

Looking ahead, the market’s focus remained on the Federal Reserve’s September meeting and the potential for a rate cut. Analysts like Fundstrat’s Tom Lee emphasized that Bitcoin and Ethereum often acted as leading indicators for equities, suggesting that a short-term bounce in crypto could signal a broader market recovery [5]. Meanwhile, the geopolitical landscape also played a role, with China’s cautious approach to stablecoins and digital currencies reflecting concerns over the erosion of monetary sovereignty. The U.S. government’s recent support for bank-issued stablecoins raised fears in Beijing about the dollar’s entrenched dominance and the potential for digital money to bypass state-controlled financial systems [7].

As the crypto market navigated a complex mix of macroeconomic signals and regulatory developments, the coming weeks would be crucial in determining whether Bitcoin’s latest rally marked a sustainable turnaround or merely a temporary reprieve. With institutional adoption, policy decisions, and technological innovation converging, the digital asset space remained at a critical juncture.

Source: [1] Bitcoin price rises ahead of Fed Jackson Hole speech (https://uk.finance.yahoo.com/news/bitcoin-price-crypto-federal-reserve-jackson-hole-085201361.html) [2] Bitcoin Gets A Price Boost From Fed Chair Jerome Powell (https://cointelegraph.com/news/bitcoin-hits-dollar116k-after-fed-s-powell-floats-rate-cut) [3] Bitcoin Bull Market Hinges On $13.8 Billion Options Expiry (https://cointelegraph.com/news/bitcoin-s-13-8b-options-expiry-puts-bulls-on-edge-ahead-of-key-test) [4] Bitcoin Oversold as ETFs Post Biggest Outflow Streak in ... (https://cointelegraph.com/news/bitcoin-price-oversold-etfs-outflows-anthony-pompliano) [5] Bitcoin Traders Position for Jackson Hole. What Powell's ... (https://www.investopedia.com/bitcoin-traders-position-for-jackson-hole-what-powell-big-speech-could-mean-for-crypto-11795212) [6] Trump Officials Trade Bitcoin Funds on Tariff News (https://cointelegraph.com/news/howard-lutnick-buys-bitcoin-amid-tariffs) [7] Why China Is Scared of Dollar Stablecoins and How It Will ... (https://www.cfr.org/article/why-china-scared-dollar-stablecoins-and-how-it-will-respond)