Ethereum News Today: Crypto Market Surges 5% as Fed Signals Rate Cuts and $750M in Shorts Liquidated

The cryptocurrency market experienced a dramatic and unexpected shift in late August, driven by Federal Reserve Chair Jerome Powell’s remarks suggesting a potential earlier-than-expected rate cut in September. These comments, coupled with a short squeeze, led to the liquidation of over $247 million in leveraged positions within a single hour on August 23, 2025—$207 million from short positions and $40 million from longs [1][2]. The surge in buying pressure caused Bitcoin to rise above $117,000 while Ethereum edged closer to a record high near $4,900, triggering further short liquidations totaling nearly $750 million [4].

The market reaction demonstrated the growing sensitivity of crypto assets to macroeconomic signals. With investors adjusting their expectations to a higher likelihood of a rate cut—now over 85%—capital flowed into crypto, reinforcing the bullish trend and prompting a broader move upward. The total market cap of cryptocurrencies rose more than 5%, surpassing $4.01 trillion [3]. This optimism extended beyond the leading pairs, with altcoins and utility tokens also experiencing increased demand as traders sought exposure to projects with real-world utility and scalability [4].

The Crypto Fear & Greed Index reflected the changing sentiment, jumping to a "Greed" score of 60 on August 4, a marked improvement from its previous "Neutral" reading. This indicated a return of risk appetite among traders who were now more willing to take positions in the market [5]. The rise in investor confidence was particularly evident in tokens like Bitcoin Hyper and Best Wallet Token, which saw renewed interest due to their functional benefits and developer-friendly features [4].

However, not all tokens performed in line with the market’s upward trajectory. XRP, for instance, declined by 20% over the previous 30 days despite hitting a 52-week high in mid-July. This downturn was attributed to the SEC’s delayed approval of new spot XRP ETFs, which was pushed to mid-October, dampening investor confidence [6]. The contrast between XRP’s performance and the broader market highlights the importance of regulatory clarity in shaping investor behavior.

Ethereum’s performance over the weekend was particularly notable. It reached new all-time highs, supported by inflows into ETH ETFs and a strong spot price. Despite expectations for higher inflows, the actual amount was lower than forecasted, with $337 million flowing into the ETH ETFs. The cumulative outflows of nearly $1 billion in the preceding days, however, constrained the potential for a more robust weekend rally [1].

Bitcoin’s sluggish performance relative to expectations has raised questions about the sustainability of the current rally. While Ethereum’s strength remains evident, Bitcoin’s price action has been more subdued, indicating a potential shift in market leadership. Solana (SOL) has emerged as a standout performer, approaching the $220 mark and drawing attention as a potential leader among altcoins. The ETHBTC pair remains a key indicator, with the 0.041BTC level being closely watched for signs of further momentum [1].

Among the top 100 cryptocurrencies, JTO, CRO, RAY, and PENDLE showed notable movement, with analysts suggesting they could benefit from any near-term rallies. The market’s focus appears to be shifting toward projects that demonstrate strong utility and real-world adoption, signaling a more mature and functionally driven investment environment [1][4].

As the market absorbs Powell’s remarks and anticipates potential rate cuts, the focus remains on assets that offer tangible value and scalability. The recent liquidation event underscores the intensity of sentiment shifts in the crypto space, where macroeconomic expectations can rapidly reprice entire markets. Investors are advised to closely monitor upcoming developments, particularly around the Federal Reserve’s policy timeline and regulatory updates, which will likely continue to shape the trajectory of the crypto market in the coming weeks.

Source:

[1] Crypto Economy: [https://crypto-economy.com/crypto-market-sees-major-short-squeeze-as-liquidations-soar/](https://crypto-economy.com/crypto-market-sees-major-short-squeeze-as-liquidations-soar/)

[2] KuCoin: [https://www.kucoin.com/news/flash/crypto-market-sees-200m-in-shorts-liquidated-in-1-hour-eth-leads-with-112m](https://www.kucoin.com/news/flash/crypto-market-sees-200m-in-shorts-liquidated-in-1-hour-eth-leads-with-112m)

[3] CoinJournal: [https://coinjournal.net/news/what-sparked-the-sudden-crypto-market-surge/](https://coinjournal.net/news/what-sparked-the-sudden-crypto-market-surge/)

[4] CryptoDnes.bg: [https://cryptodnes.bg/en/best-crypto-to-buy-now-as-market-rises-liquidating-500-million-in-shorts/](https://cryptodnes.bg/en/best-crypto-to-buy-now-as-market-rises-liquidating-500-million-in-shorts/)

[5] FastBull: [https://www.fastbull.com/news-detail/crypto-sentiment-returns-to-greed-as-bitcoin-and-news_6300_0_2025_3_8321_3](https://www.fastbull.com/news-detail/crypto-sentiment-returns-to-greed-as-bitcoin-and-news_6300_0_2025_3_8321_3)

[6] Nasdaq: [https://www.nasdaq.com/articles/1-key-reason-why-xrp-lags-behind-ethereum-and-other-top-cryptocurrencies](https://www.nasdaq.com/articles/1-key-reason-why-xrp-lags-behind-ethereum-and-other-top-cryptocurrencies)