Bitcoin staged a sharp spike to $116,250, gaining more than 3% in 24 hours and briefly lifting sentiment across the crypto market. The move comes despite a cautious backdrop from traditional markets, where traders continue to weigh the Federal Reserve’s rate outlook.
The rally highlights crypto’s resilience and ability to attract capital flows even in moments of macro uncertainty.
Powell’s Jackson Hole Message
At Jackson Hole, Fed Chair Jerome Powell acknowledged progress in cooling inflation but avoided committing to an aggressive rate-cut path. He signaled that a 25 bps cut in September is “highly likely”, the clearest sign yet of near-term easing.
However, Powell cautioned against expecting a rapid series of cuts. He stressed the Fed’s “data-dependent” stance, pointing to risks from tariff-driven inflation and keeping the door open to holding rates higher for longer if needed.
Fed Chair Powell is indicating a 25bps September rate cut is **highly likely**. His Jackson Hole speech is about as clear cut as the Fed gets.
But…he's also signaling don't bet on a bunch more rate cuts after that. Fed leaders will still be watching what happens with… pic.twitter.com/ygadFMgbms— Heather Long (@byHeatherLong) August 22, 2025
The mixed tone spilled into markets. U.S. equities trimmed early gains, and crypto mirrored the volatility, leaving traders caught between optimism over easing inflation and concern that liquidity could remain tight through year-end.
FedWatch Tool Reaction
The CME FedWatch Tool now shows an 87.3% probability of a cut to 400–425 bps at the September 17 meeting, with only 12.7% odds of holding steady at 425–450 bps. Markets largely took this as confirmation of easing, though Powell’s warning kept risk sentiment restrained.
Crypto Market Reaction
Despite Powell’s restraint, major digital assets held ground. Bitcoin trades at $116,269, up 3.28% in the past 24 hours, with a market cap of $2.31 trillion. Ethereum gained 12.3% this week to $4,749, showing renewed momentum ahead of its network upgrades. XRP climbed to $3.04, while Solana surged 7.48% in the last day to $194.80, reflecting strong demand for high-performance chains.
The resilience underscores how crypto is now tightly linked to global monetary policy shifts. Investors are weighing whether Powell’s hesitation delays fresh capital inflows, or whether slowing inflation creates room for a medium-term rally across digital assets.
Bitcoin Technical Outlook
Technically, Bitcoin faces a battle at the $116,500–$118,000 zone, where sellers capped recent rallies. A breakout above $118,500 could set the stage for a run toward $123,000 and eventually the psychological $130,000 barrier.
On the downside, $112,000 is the key support level to watch. A close below this threshold risks deeper correction toward $108,000.
- 50-day SMA: trending upward, supporting bullish momentum.
- RSI (Daily): sits near 54, leaving room for further gains.
- MACD: signals weakening bearish pressure, but volume confirmation is needed for a breakout.
Broader Implications
Crypto investors are increasingly aligning their strategies with Fed communication. While Powell’s speech didn’t commit to near-term cuts, the acknowledgment of cooling inflation gives Bitcoin and Ethereum room to consolidate above key support levels. If economic data in Q4 confirms slowing inflation and softer growth, crypto could benefit as capital seeks alternative hedges.
For now, the market remains data-driven: stronger U.S. inflation readings would pressure Bitcoin below $112K, while softer prints may open the path back toward $130K.
Summary: Powell’s cautious tone at Jackson Hole has tempered hopes of quick rate cuts, but crypto markets remain resilient. Bitcoin’s outlook hinges on defending $112K support and breaking past $118.5K resistance to confirm a push toward $130K.
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