Crypto Markets Slip Ahead of Jackson Hole as Fed Minutes Signal Caution

Cryptocurrency markets retreated on Thursday, Aug. 21, as investors digested the Federal Reserve’s latest minutes and turned their attention to the Jackson Hole Symposium on Friday, Aug. 22.

Bitcoin (BTC) is currently trading at $112,773, marking a modest decline of 0.4% on the day and a nearly 4.7% drop over the past week. Ethereum (ETH) is also down 0.7% in the last 24 hours to $4,242, representing a 7.9% decline over the week.

XRP and Solana (SOL) followed a similar trend, with XRP at $2.89, down 0.4% on the day and 7.5% over the week, while SOL has slipped 1.5% in the past 24 hours to $182, losing 6.9% since last week.

Overall, the total cryptocurrency market capitalization fell 1% over the past 24 hours to $3.9 trillion, with Bitcoin dominance at 57.5% and Ethereum at 13.1%, according to CoinGecko.

Over the past 24 hours, around $228 million in crypto positions were liquidated, including $244 million of long positions and $194 million of shorts, per CoinGlass. Ethereum led with more than $91 million in liquidations, followed by Bitcoin at $34 million.

ETFs

Spot Bitcoin exchange-traded funds (ETFs) recorded nearly $312 million in net outflows on Wednesday, Aug. 20, the fourth straight day of withdrawals, pushing total outflows over the week to $971 million, according to SoSoValue.

Meanwhile, spot ETH ETFs experienced over $240 million in net outflows on Wednesday, a day after recording the second-largest single-day outflow since their launch in July 2024. Total outflows for the week have now reached roughly $926 million.

Fed Minutes and Jackson Hole

The cautious sentiment came after the Federal Reserve’s July minutes revealed on Aug. 20 that officials remain concerned about inflation and may be reluctant to cut interest rates.

“Participants generally pointed to risks to both sides of the Committee’s dual mandate, emphasizing upside risk to inflation and downside risk to employment,” the minutes noted.

Fed Governors Christopher Waller and Michelle Bowman disagreed with the decision to keep rates unchanged, saying the Fed should start cutting instead. The Fed’s key rate has stayed between 4.25% and 4.5% since December.

Investors are now turning their focus to Fed Chair Jerome Powell’s remarks at Jackson Hole on Friday, which could provide clues on the central bank’s policy moves heading into the fall.

The outcome would likely impact crypto markets in the medium term, determining whether Bitcoin posts gains or suffers a pullback.

“A Fed rate cut or new chair means risk-on for retail sitting in cash,” Function CEO Thomas Chen said in comments shared with The Defiant. “Lower rates make BTC more attractive as traditional savings become less compelling.”

Chen explained that a bigger catalyst would be a pro-crypto Fed chair appointment, which “could give institutions confidence for more regulatory clarity with respect to corporate treasury adoption of Bitcoin.”

Paul Howard, Senior Director at Wincent, echoed Chen’s statement, noting that a change in direction of U.S. interest rates next month “would likely be the fuel the market needs to breach a new all-time-high.”

“Meanwhile, we keep our eyes out on what regulatory changes could come in the next few months,” Howard added.