Bitcoin Rebounds, Ether Leads Rally as Powell Rate-Cut Signal Triggers $375M in Liquidations
Bitcoin and Ether surged on Friday after Federal Reserve Chair Jerome Powell hinted at a potential interest rate cut, sparking a swift rebound in crypto markets and forcing over $375 million in derivatives liquidations.
Bitcoin (BTC) jumped 2.6% to $114,800 after rebounding from key support near $111,800. The move came as Powell’s remarks at Jackson Hole shifted market expectations, with investors increasingly pricing in a rate cut as early as September.
“Downside risks to employment are rising,” Powell said. “If those risks materialize, they can do so quickly through sharply higher layoffs and rising unemployment.” The market interpreted his comments as a dovish pivot, reigniting appetite for risk assets.
ETH Soars 10% as Shorts Suffer Heavy Losses
Ether (ETH) was the day’s standout performer, rallying 10% from $4,200 to $4,650 within hours. The sharp upside move triggered $150 million in liquidations on ETH positions alone, contributing to the $375 million in total liquidations across crypto futures, according to CoinGlass.
The price rally followed a period of weakness, as traders braced for a potentially hawkish Powell speech. The sudden reversal caught many short positions offside.
Open Interest Climbs Despite Liquidations
Despite the wave of liquidations, derivatives open interest climbed to a four-day high, according to Coinalyze. This suggests traders are aggressively re-entering positions, adding leverage behind the recovery.
Bitcoin briefly touched $115,700 before pulling back to $114,800, maintaining gains but reflecting ongoing market volatility.
Altcoins Mixed as Staking Tokens Outperform
While most altcoins lagged behind, Lido (LDO) and Ethena (ENA) extended gains following recent U.S. Securities and Exchange Commission (SEC) clarity on staking. ETH’s strong rally and staking tailwinds continue to set the tone for the broader DeFi sector.
Outlook
With the Fed now seemingly more open to rate cuts, the macro environment has shifted in favor of crypto. Traders are watching closely to see if BTC can hold above $114,000 and whether ETH can sustain momentum above $4,600 as speculation intensifies ahead of the Fed’s September meeting.
