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Bitcoin price climbed back to $116,000 after Federal Reserve Chair Jerome Powell’s Jackson Hole speech raised expectations of a September rate cut.
The remarks, combined with over $200 million in liquidated shorts, lifted the total crypto market value above $4 trillion.
Powell’s Remarks Boost Crypto Confidence
In a major development, Bitcoin rose above $116,000 following comments by Jerome Powell at the Jackson Hole conference.
According to reports, Powell said the balance of risks “may warrant adjusting policy.”
He noted that employment risks increased as labor supply weakened in line with demand.
He also said the Federal Reserve was moving away from its flexible average inflation targeting framework.
In his speech, Powell said inflation could not be assumed to stay steady. His comments suggested the Federal Reserve may lower interest rates in September.
It is worth noting that the comments emerging from his speech immediately impacted digital assets.
Data from CoinGecko showed that the total crypto market value climbed back above $4 trillion the same day.
Figures from Coinglass revealed that more than $200 million worth of short positions were liquidated as traders reacted to the sudden price jump.
The largest altcoin Ethereum, led the rally with a gain of almost 8% on the day and climbed to an intraday high above $4,800
Bitcoin itself rose by more than 3%, and other major coins such as Solana, Binance Coin, and XRP also traded higher.
A crypto market heatmap shared by CoinGecko showed strong gains across most coins, with very few moving lower.
Dovish Tone Drives Buying Interest Across the Crypto Market
It is worth stating that many investors saw Jerome Powell’s speech as a hint that interest rates may be cut soon.
This is because lower rates make borrowing cheaper, which often pushes more money into assets like cryptocurrencies.
In addition, crypto market participants said this shift in policy expectations was one of the main reasons for the rally.
Interestingly, Ethereum crossed $4,800 during the session. It is currently trading at $4,741.73 amid mild pullbacks.
On-chain data from Lookonchain showed that a long position of 135,265 ETH, valued at $577 million, recorded an unrealized profit of over $40 million as a result.
This position highlighted the scale of exposure some large investors had taken ahead of the market move.
As of writing, Ethereum’s value was close to $570.4 billion, based on CoinMarketCap data.
Traders said interest was rising because more people were using it for finance apps, and upgrades were making the network faster.
Analysts pointed to its growing role in decentralized finance and the impact of scalability upgrades as reasons behind the strong interest.
Bitcoin remained the largest digital asset by value, reclaiming the $116,800 level, but Ethereum was gaining ground as an alternative.
The liquidation of short positions also fueled the broader crypto market rally. CoinGlass data confirmed that more than $200 million in shorts were closed as prices jumped.
This created further upward pressure as traders were forced to buy back into the market.
Large Holders Take Profits as Bitcoin Prices Climb
Whales, or large holders of cryptocurrency, also influenced the day’s events. On-chain reports showed that some older Bitcoin holdings were moved into Ethereum.
Some long-time holders also moved their coins, with one investor selling part of a seven-year-old Bitcoin stash.
The jump above $4,600 for Ethereum and $116,000 for Bitcoin allowed many to take profits or cut back holdings.
The rapid change in crypto market sentiment followed Powell’s Jackson Hole remarks closely.
Traders linked the sudden surge in value to expectations of a September rate cut, combined with the pressure of liquidated shorts and the repositioning of large investors.
The rally pushed the crypto market’s value back above $4 trillion. Notably, analysts said the next move would depend on new economic data and the Fed’s decision in September.
