Crypto Market Sentiment Rebounds After Dovish Powell Speech
Federal Reserve Chairman Jerome Powell’s recent Jackson Hole speech marked a turning point in crypto market sentiment. After a near 10% drop in Bitcoin price driven by inflation concerns and $1.18 billion in spot Bitcoin ETF outflows, the market braced for further declines. However, Powell’s dovish comments triggered a powerful short squeeze, sparking a rebound across major cryptocurrencies.
Bitcoin and Ethereum led the recovery, despite ongoing ETF outflows—Ethereum ETFs saw a daily net withdrawal of $197 million, the largest since April. This rebound highlights the market’s sensitivity to macroeconomic cues and anticipations of monetary policy.
Institutional capital flows remain cautious. Persistent net outflows from Bitcoin ETFs and Ethereum ETFs suggest that sustained upward momentum hinges on renewed institutional interest. Bitfinex Alpha analysis indicates that Bitcoin may trade within a defined range in the short term. Altcoin performance is likely to stay muted until larger investors re-enter the market.
Crypto traders should monitor ETF flow data and upcoming macroeconomic reports. The interplay between Federal Reserve guidance and institutional capital will be crucial for future shifts in crypto market sentiment.
Neutral
The dovish tone of Powell’s Jackson Hole speech triggered a swift short squeeze and rebound in Bitcoin and Ethereum, reflecting a bullish response to macroeconomic guidance. However, substantial net outflows totaling $1.18 billion from spot Bitcoin ETFs and $197 million from Ethereum ETFs underscore ongoing institutional caution. This balance of a strong initial rally against persistent capital withdrawals suggests the market may consolidate in the short term, yielding a neutral impact overall.