Fed Chair Powell’s dovish remarks at Jackson Hole sparked a rapid crypto rally: Ethereum led gains toward $4,834, Bitcoin held near $117,000, and Chainlink hit $27.11, as markets priced a possible September Fed rate cut boosting liquidity for risk assets.
Fed rate cut optimism drove a cross-market rally.
Ethereum approached a record high while Bitcoin remained range-bound near key resistance.
On-chain metrics show rising exchange supply and mixed utility signals, warning of short-term volatility.
Meta description: Fed rate cut crypto reaction: Powell’s comments spurred a crypto rally led by Ethereum; assess on-chain signals and risk. Read analysis and takeaways now.
How does a Fed rate cut expectation affect crypto markets?
The Fed rate cut crypto narrative directly increases liquidity and risk appetite, typically lifting equities and crypto simultaneously. Short-term price rallies often follow dovish Fed signals, but on-chain metrics such as exchange supply and active addresses can signal mounting risk even amid rallies.
Why did Ethereum, Bitcoin and Chainlink react to Powell’s Jackson Hole remarks?
Investors interpreted Powell’s tone as opening the door to a September rate cut, prompting a classic “buy the rumor” move. Ethereum led gains near $4,834, Bitcoin hovered around $117,000, and Chainlink touched $27.11 — all reflecting increased appetite for risk assets.
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Sentiment platform Santiment recorded an 11-month high in discussion around terms like “Fed,” “rate,” and “cut,” a sign of heightened market focus and potential euphoria. Plain-text sources referenced: Santiment, Coinbase research, Kobeissi Letter.
Short-term on-chain utility metrics cooled: Active Addresses and transaction volume fell while Supply on Exchanges rose, suggesting potential selling pressure despite higher prices.
Ethereum’s long-term holding indicators remain supportive: Mean Dollar Invested Age and falling Exchange Supply point to continued accumulation among long-term holders, but MVRV ratios advise caution.
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Source: https://en.coinotag.com/ethereum-may-edge-toward-record-highs-amid-fed-rate-cut-hopes-as-on-chain-data-signals-risks/