Ethereum News Today: Crypto Market Rises 2.3% on Fed Cut Hopes and ETF Outflow Slowdown

The cryptocurrency market experienced a significant rebound on August 4, 2025, following a week of sharp declines driven by weak U.S. employment data and heightened political uncertainty. Major digital assets such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), and Solana (SOL) saw notable price recoveries. The total market cap climbed to $3.85 trillion, reflecting a 2.3% increase over the previous 24 hours, with trading volume hitting $108 billion [1].

The rebound appears to be a technical correction after last week's overly negative sentiment, which was exacerbated by ETF outflows and political developments. On August 1, the crypto market had suffered a sharp drop due to weaker-than-expected U.S. job numbers and a sudden leadership change at the Bureau of Labor Statistics (BLS). These factors fueled fears of a deteriorating economy and added a layer of political uncertainty, as U.S. President Donald Trump accused the data of being manipulated for political purposes [1].

Despite the outflows, institutional investment in the crypto space remained robust. Spot Bitcoin ETFs saw a net outflow of $812 million on August 1, the second-largest in their history since launching in early 2024. Ethereum ETFs also recorded a net outflow of $152 million, ending a 20-day streak of positive inflows in July [1]. However, over the past 30 days, Ethereum ETFs had still recorded $133 million in inflows, continuing a 15-week trend of positive flows, while Bitcoin ETFs saw $404 million in outflows during the same period [1].

Analysts noted that the outflows may have been driven by short-term profit-taking rather than a fundamental shift in market sentiment. The broader trend remains positive, with year-to-date inflows into Bitcoin ETFs reaching $20 billion and Ethereum ETFs continuing to show steady institutional support [1]. This suggests that long-term confidence in the crypto ecosystem, particularly in Ethereum’s DeFi and smart contract innovations, remains intact.

The July U.S. employment report was a key trigger for the initial sell-off. The report showed only 73,000 new jobs added, well below the expected 175,000. The unemployment rate also rose to 4.2%, signaling a softening labor market. These numbers raised expectations for a Fed rate cut in September, a development that typically favors risk assets like cryptocurrencies [1]. The CME FedWatch tool showed a sharp rise in bets on a rate cut following the report, aligning with Trump’s public calls for easier monetary policy [1].

Political developments further complicated the market environment. Trump’s abrupt dismissal of the BLS director and his claims that the job data was manipulated added to the uncertainty. While there is no evidence to support these claims, the rhetoric deepened concerns about data integrity and contributed to market anxiety. The White House responded by announcing plans to appoint “high-quality talent” to the BLS, signaling an effort to restore public trust [1].

Despite the volatility, the market demonstrated resilience. In the 24 hours leading up to August 4, over $230 million in crypto positions were liquidated, with short positions accounting for $179 million of that total. Ethereum had the largest liquidation amount at $80 million, while Bitcoin accounted for $44 million. The activity highlighted the intense short-term pressure between bullish and bearish forces in the market [1].

The recovery on August 4 can be attributed to a combination of factors. The rising expectations of a Fed rate cut, the slowdown in ETF outflows, and a technical rebound from recent lows all played a role. Investors appear to have digested the negative news and are beginning to look past the short-term turbulence. However, the intertwined nature of economic and political developments means that the market remains sensitive to both policy shifts and data releases.

In the broader context, the crypto market’s resilience demonstrates its ability to absorb shocks and continue attracting long-term capital. While short-term volatility is inevitable, the underlying factors—such as institutional adoption and macroeconomic signals—continue to support a constructive outlook. Investors are advised to closely monitor both the Fed's policy trajectory and political developments, as they will likely remain key drivers of market sentiment in the near term [1].

Source: [1] Cryptocurrency Market Rebounds After Negative Data (https://coinmarketcap.com/community/articles/68917f5e60673d39c3411d40/)