Ethereum News Today: Investors Reel as Powell's Dovish Shift Sparks Crypto Rally

Ethereum and Bitcoin surged on Friday as Federal Reserve Chair Jerome Powell’s comments from Jackson Hole, Wyoming, indicated the possibility of an interest rate cut in the coming months. The remarks sparked a wave of optimism among investors, with Ethereum climbing nearly 7% to reach $4,600, according to CoinGecko. This marked a significant rebound from earlier in the week, when the token had fallen as low as $4,000 amid growing concerns about the Fed's policy trajectory. The price rally followed a 12% increase in the following hours, pushing Ethereum closer to its 2021 all-time high of $4,866.01. Coin Metrics reported the token last trading at $4,738.91.

Bitcoin mirrored the upward trend, rising 3% to $116,191.09 as traders positioned themselves for a potential shift in monetary policy. Powell’s speech, which emphasized the Fed’s readiness to adjust its policy stance based on economic conditions, caught many market participants off guard. “Traders seem to have been caught completely off-sides by Powell's dovish comments today,” said Jordi Alexander, CEO of Selini Capital. “The market positioning in recent sessions has seen clear risk-off moves in assets like crypto and tech, and today's setting up of a September rate cut is causing a panicked repositioning.” The unexpected shift led to a flurry of activity in crypto derivatives, with CoinGlass reporting approximately $120 million in short liquidations in a one-hour period as traders scrambled to adjust their positions.

Powell’s speech also had a broader impact on the altcoin market. XRP and Solana both surged more than 6% within an hour of his remarks, with XRP regaining the $3 threshold for the first time in several days. Dogecoin also saw a sharp rise of over 7%. However, despite the positive momentum, most altcoins remained slightly negative for the week, reflecting lingering investor caution about the Fed’s long-term policy path. Analysts noted that the market had been bracing for Powell’s final Jackson Hole speech, which had driven a risk-off sentiment earlier in the week. The sudden shift toward dovish commentary triggered a rapid repositioning in crypto and tech assets.

The bullish momentum was further supported by institutional demand, with Ethereum spot ETFs seeing $287.6 million in inflows on Thursday after four consecutive days of outflows. Farside Investors reported that month-to-date inflows into these ETFs totaled $2.55 billion, indicating strong investor appetite for Ethereum-based products. Meanwhile, ETH balances on exchanges have reached a nine-year low, according to Glassnode data, with the total supply dropping to 14.9 million ETH—the lowest level since July 2016. This decline in exchange liquidity is often interpreted as a sign of potential price appreciation, as fewer ETH tokens are available for selling.

From a technical perspective, Ethereum’s price action has validated a bull flag pattern, with the token breaking through a key resistance level at $4,300. Analysts have projected that the price could extend this upward trend to as high as $6,150 based on the pattern’s historical performance. Some traders, however, have expressed more ambitious expectations, citing a monthly MACD golden cross and a breakout from a four-year downtrend as signs that Ethereum could eventually reach $10,000. While such predictions remain speculative, they highlight the growing confidence in Ethereum’s potential as a long-term investment.

Source: [1] Ethereum, Bitcoin Spike After Powell Signals Interest Rate Cut (https://finance.yahoo.com/news/ethereum-bitcoin-spike-powell-signals-143138288.html) [2] Ether surges, trading close to its record again after Powell ... (https://www.cnbc.com/2025/08/22/crypto-market-today.html) [3] ETH 'god candle' emerges amid Fed rate cut hopes (https://cointelegraph.com/news/eth-god-candle-emerges-amid-fed-rate-cut-hopes-is-dollar6k-ether-next)