Crypto Pullback Hits Bitcoin, Ether Ahead of Powell
Crypto markets extended their pullback on Tuesday as investors grew cautious ahead of Federal Reserve Chair Jerome Powell’s Jackson Hole speech. Bitcoin (BTC) slid below $114,000, off 9% from its recent record high above $124,000. Ether (ETH) dropped under $4,200, while major altcoins such as Chainlink (LINK), Avalanche (AVAX), Toncoin (TON), Ethena (ENA) and Aptos (APT) declined 4–6%.
The crypto pullback coincided with risk-off sentiment in traditional markets, with the Nasdaq and S&P 500 down 0.9% and 0.4% respectively. A hotter-than-expected U.S. Producer Price Index report renewed inflation concerns and prompted investors to reconsider the likelihood of a Federal Reserve rate cut in September. CME’s FedWatch Tool now assigns just a 15% probability to a 25-basis-point cut, down from nearly 98% a week earlier.
Crypto treasury strategy companies also saw sharp losses: KindlyMD (NAKA) fell 14%, Bitmine Immersion (BNMR) lost 10% and Sharplink Gaming (SBET) plunged 8%. Traders are positioning for potential hawkish remarks from Powell, signaling continued volatility in the near term.
Bearish
The news highlights a clear crypto pullback driven by concerns over a potentially hawkish Fed stance at Jackson Hole. Bitcoin and Ether have pulled back sharply from recent highs, and altcoins along with crypto treasury strategy stocks have posted significant losses. Similar sell-offs occurred during past Fed tightening cycles and key Fed speeches. In the short term, traders are likely to brace for increased volatility and risk-off sentiment if Powell emphasizes inflation risks. Long term, markets may stabilize once rate policy becomes clearer, but the immediate outlook remains bearish.