After Powell’s speech hinting at rate cuts, Ether sets its first new record since 2021. The cost of ether broke its 2021 high on Friday as investors went back to taking on more risk after Federal Reserve Chair Jerome Powell made reference to impending rate cuts. Late Friday saw a 15% increase in the second-largest cryptocurrency, reaching $4,885.00 and breaking its November 2021 peak of $4,866.01. Bitcoin price today also surged, reaching $117,008.29, up 4%.
Powell made the changes during his yearly speech from Jackson Hole, Wyoming. “The baseline outlook and the changing balance of risks may mean that we need to change our policy stance, since policy is in a restrictive area,” Powell said.
Powell’s dovish remarks today appear to have taken traders completely by surprise, according to Jordi Alexander, CEO of cryptocurrency trading company Selini Capital. “As shorts are squeezed, the market has clearly moved to risk-off positions in tech and cryptocurrency in recent sessions. The setting up of a rate cut in September is causing a panicked repositioning.”
“Now that the Fed and the administration appear to be in agreement on easing, momentum is back on the menu,” he continued. According to CoinGlass, ETH experienced over $120 million in short liquidations in a single hour around the time of the speech. Traders buy ETH back from the market to liquidate their positions when they short the cryptocurrency using leverage and its price increases. As a result, more positions are liquidated and the price of the coin rises even further.
When investors switched away from IT businesses this week, shares of companies that were primarily focused on accumulating ether some of the hardest hit bounced back with the coin on Friday. SharpLink Gaming and Bitmine Immersion saw increases of 15% and 12%, respectively. For the first time in three weeks, Bitmine had a weekly decline of above 7%. After the ether treasury business offered up to 74.8 million of its shares for selling, shares of ETHzilla, which is funded by Peter Thiel, fell more than 31% at one point on Friday. In response to Powell’s Jackson Hole comments, it closed the session down 31.4%.
In other cryptocurrency market news, exchange Coinbase and bitcoin proxy Strategy both saw 6% increases, while Solana-based treasury company DeFi Development saw a 21% spike.
Ethereum price update shows Ether has been a market leader in cryptocurrency during the last two months. Stablecoins, which make up 40% of all blockchain fees and more than half of which are powered by the Ethereum blockchain, have seen a surge in institutional interest due to regulatory tailwinds that sparked that change.
Tom Lee of Fundstrat recently told CNBC’s Worldwide Exchange that ether is “the biggest macro trade over the next 10 to 15 years and a lot of it has to do with the fact that stablecoins have become the Chat GPT moment for crypto.”
Now, we have the SEC’s Project Crypto and the GENIUS Act, which is basically Wall Street on the blockchain.
Crypto Market Analysis & Predictions
The latest crypto market analysis points to stronger risk appetite returning to digital assets. Analysts note that a Bitcoin surge after Fed comments could trigger wider altcoin performance gains, especially if liquidity continues flowing into Ethereum-based projects.
Many traders are eyeing crypto price prediction models that suggest ETH could break the $5,000 threshold if Powell’s Fed rate cut impact on crypto sparks further momentum. With heightened volatility, cryptocurrency trading trends indicate increased leverage plays and higher institutional involvement in digital assets market updates.