TLDR
- Fed Chair Powell hinted at September rate cuts during his Jackson Hole speech, pushing Bitcoin above $117,000
- Ether broke its 2021 record, surging 15% to hit $4,885 and setting a new all-time high
- Spot Bitcoin ETF outflows dropped from over $500 million to just $23.2 million, showing institutional confidence
- $753 million in liquidations occurred, with $463 million in short positions being wiped out
- Major altcoins like XRP, Solana, Cardano and Dogecoin posted strong gains following Bitcoin’s momentum
The cryptocurrency market experienced a strong rally on Friday, with Bitcoin climbing above $117,000 and Ether setting a new all-time high. The surge came after Federal Reserve Chair Jerome Powell’s speech at Jackson Hole hinted at upcoming interest rate cuts.
Bitcoin rose 4% to reach $117,008, marking a 93% increase from one year ago. The cryptocurrency quickly bounced from $111,600 to above $117,000 following Powell’s comments about policy adjustments.
Ethereum emerged as the day’s biggest winner, surging 15% to hit $4,885. This broke the cryptocurrency’s previous record of $4,866 set in November 2021.
Powell’s speech included key language that excited markets. He stated that policy is in “restrictive territory” and that “the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”
The CME FedWatch tool now shows a 75% probability of a rate cut in September. This dovish shift encouraged investors to move into riskier assets like cryptocurrencies.
ETF Flows Show Institutional Confidence
Spot Bitcoin ETF outflows dropped sharply this week, providing another boost to market sentiment. After seeing outflows of $523.3 million on August 19, $315.9 million on August 20, and $194.4 million on August 21, the outflow fell to just $23.2 million on August 22.
This dramatic reduction in outflows suggests institutions are holding their Bitcoin positions rather than selling. The shift gave markets a fresh boost of confidence in the asset class.
Liquidations Fuel Price Movement
The rally was amplified by widespread liquidations across the crypto market. According to CoinGlass data, 176,721 traders were liquidated in the past 24 hours, with total liquidations reaching $752.96 million.
Short sellers bore the brunt of the losses, with nearly $463 million in short positions wiped out. Ether accounted for more than half of all liquidations at $385.2 million, while Bitcoin recorded $111.76 million in short liquidations.
Around the time of Powell’s speech, ETH saw about $120 million in short liquidations within just one hour. When leveraged short positions get liquidated, traders must buy back the cryptocurrency to close their positions, which pushes prices higher.
This forced buying created additional upward pressure on prices beyond the initial reaction to Powell’s comments. The liquidation cascade helped extend the rally throughout the trading session.
Related companies also saw strong moves. Shares of Bitmine Immersion and SharpLink Gaming jumped 12% and 15% respectively. Solana-focused treasury firm DeFi Development surged 21%, while crypto exchange Coinbase and bitcoin proxy Strategy both advanced 6%.
Altcoin Season Approaches
The market rally extended beyond Bitcoin and Ether to major altcoins. XRP, Solana, Cardano, and Dogecoin all posted strong gains during the session.
The Altcoin season index jumped to 57, indicating that altcoin season may be approaching. This metric tracks when alternative cryptocurrencies begin outperforming Bitcoin.
Gas fees on the Ethereum network have also reached record lows, making it cheaper for users to interact with decentralized finance applications. This technical improvement has supported renewed interest in Ethereum-based projects.
The cryptocurrency market’s total capitalization approached $4 trillion during the rally, reflecting the broad-based nature of Friday’s gains across digital assets.
Final Thoughts
For those asking “why is crypto up today,” the answer lies in Powell’s dovish Jackson Hole remarks that shifted market expectations toward September rate cuts. The combination of Fed policy signals, reduced ETF outflows, and massive short liquidations created the perfect storm for Friday’s crypto rally.
