Bitcoin News Today: Investors Chase Fed Signals as Crypto Market Balances on a Knife's Edge

Speculations about potential rate cuts by the Federal Reserve have intensified in the crypto market, with investors closely monitoring developments following a recent speech by Fed Chair Jerome Powell at the Jackson Hole symposium. Powell’s comments, which hinted at a “shifting balance of risks that may warrant policy adjustments,” have been widely interpreted as a dovish signal, fueling optimism across financial markets, including cryptocurrency. The market has responded with a rally, with Bitcoin consolidating near $117,000 and Ethereum inching closer to its all-time high of $4,866 [2].

The crypto market’s performance has become increasingly correlated with traditional financial assets. For instance, the S&P 500 recently hit a record high, aligning with bullish sentiment for crypto and gold. This correlation highlights the growing influence of macroeconomic factors on digital asset prices. Analysts note that Bitcoin and the S&P 500 have historically moved in tandem during periods of dovish monetary policy, reinforcing the idea that Fed actions are a key driver of market sentiment [2].

However, on-chain data suggests a more nuanced picture. While Ethereum’s price action appears strong, its MVRV (Market Value to Realized Value) ratio has entered a “danger zone,” signaling elevated risk for potential pullbacks. The 30-day MVRV ratio is nearing 15%, and the long-term MVRV is at 58.5%, levels often associated with increased volatility and profit-taking [2]. Additionally, Bitcoin’s on-chain indicators, such as the rising supply on exchanges, point to potential selling pressure. Since June, the amount of BTC held on exchanges has increased by nearly 70,000, a shift from the long-term trend of coins being moved into cold storage [2].

Social media sentiment also provides a mixed signal. While Powell’s comments have driven a “buy the rumor” environment, the surge in discussions about Fed rate cuts has reached an 11-month high. Analysts caution that this level of market euphoria could signal a potential top, as extreme social sentiment often precedes reversals. Furthermore, Ethereum’s on-chain activity, such as the Mean Dollar Invested Age, suggests a bullish long-term outlook, with dormant coins re-entering circulation [2].

Chainlink has emerged as a standout performer, with its price reaching $27.11—a new year-to-date high and a sign of market decoupling. The asset has outperformed broader market trends, demonstrating resilience amid volatility. On-chain and social metrics, including active addresses and whale transactions, indicate growing interest and activity, reinforcing its position as a potential market leader [2]. However, analysts recommend using tools like the Activity Matrix to differentiate between assets showing short-term hype and those with long-term fundamentals [2].

The broader market environment remains sensitive to shifts in the Fed’s stance. While the current rally appears driven by macroeconomic optimism, any deviation from the expected rate-cut narrative could trigger a sharp correction. Analysts stress the importance of monitoring key events, such as future Fed announcements and economic data, as they remain central to market direction [2].

Source:

[1] title1 (https://app.santiment.net/)

[2] title2 (https://app.santiment.net/insights/read/this-week-in-crypto-full-written-summary-w4-august-8868)

[3] title3 (https://www.federalreserve.gov/newsevents/speech/powell20250822a.htm)

[4] title4 (https://en.wikipedia.org/wiki/Jerome_Powell)

[5] title5 (https://www.cnn.com/2025/08/22/economy/fed-powell-jackson-hole-speech)

[6] title6 (https://www.coingecko.com/en/coins/bitcoin/eth)