Ethereum News Today: Fed Easing Signals Spark 77% Crypto Rally Chances With Short Liquidations Up 200%

The Federal Reserve’s recent signals of potential rate cuts have ignited a strong rally across cryptocurrency markets. With Fed Chair Jerome Powell indicating at the Jackson Hole Symposium that the central bank may ease monetary policy as early as September, traders interpreted the comments as a sign that interest rates could soon move lower. Powell emphasized that the labor market was showing signs of cooling, and that the Fed might adjust its policy stance accordingly, fueling optimism about an easing cycle [10]. The odds of a September rate cut climbed to 77% on Polymarket, while the CME futures market estimated a probability of 80% [4].

The market reacted swiftly, with Ethereum (ETH) surging to a four-year high, and Bitcoin (BTC) along with several altcoins like Arbitrum, Morpho, and Ethena experiencing double-digit gains [4]. The sudden shift in investor sentiment toward risk-on assets is a common feature of environments where interest rates are expected to decline, as lower rates tend to boost the valuations of high-growth and speculative assets [4].

The rally was further amplified by a sharp reversal in short positions. CoinGlass data showed that short liquidations spiked by 200% in a single day, reaching $684 million, with Bitcoin and Solana shorts suffering significant losses [4]. This indicates that the market was pricing in a broader and more fundamental shift in monetary policy expectations.

Analysts suggest that a Fed rate cut in September would mark the first easing since December 2024 and could signal the beginning of a prolonged accommodative policy period [9]. However, the timing and extent of any rate reductions will depend heavily on incoming data, particularly related to the labor market and inflation. If the job market continues to weaken and inflation remains subdued, the Fed could be compelled to adopt a more aggressive stance.

While the current surge appears to be driven by optimism, some experts caution that it may represent a "dead-cat bounce"—a temporary rebound in a downtrend rather than a long-term reversal [4]. This highlights the crypto market’s susceptibility to rapid shifts in sentiment based on macroeconomic developments and policy signals.

The broader implications of the Fed’s potential rate shift remain to be seen. Investors are now closely watching for further policy guidance and economic indicators over the coming months. The central bank’s actions could play a decisive role in shaping the near-term trajectory of the cryptocurrency market [10].

Source:

[1]title1.....................................(https://www.ainvest.com/news/altcoin-rally-fed-rate-cut-sparks-explosive-growth-crypto-markets-2508/)

[2]title2.....................................(https://www.mitrade.com/insights/news/live-news/article-3-1063836-20250823)

[3]title3.....................................(https://www.ainvest.com/news/bitcoin-ethereum-response-fed-easing-signals-september-inflection-point-digital-assets-2508/)

[4]title4.....................................(https://www.banklesstimes.com/articles/2025/08/22/crypto-bull-run-why-are-altcoins-like-arbitrum-ethena-eth-going-up/)

[5]title5.....................................(https://coinpedia.org/price-analysis/bitcoin-enters-trend-shift-territory-is-a-breakout-to-new-all-time-highs-on-the-horizon/amp/)

[6]title6.....................................(https://cryptodnes.bg/en/ethereum-price-prediction-ethereum-breaks-all-time-high-after-four-years-whats-next-for-eth/)

[7]title7.....................................(https://m.fastbull.com/news-detail/ether-hits-fouryear-high-as-feds-powell-sparks-4340953_0)

[8]title8.....................................(https://www.mexc.com/news/powells-jackson-hole-address-hints-at-rate-cuts/71937)

[9]title9.....................................(https://learn.bybit.com/en/crypto-insight/first-rate-cut-since-december-2024)

[10]title10.....................................(https://coincentral.com/bitcoin-bull-run-creates-opportunity-4-lower-priced-cryptos-to-load-up-on-before-market-rotation-kicks-off)