In a dramatic turn of events, Bitcoin surged following key remarks from Federal Reserve Chair Jerome Powell at the Jackson Hole symposium on August 24. The market response was swift and powerful, with Bitcoin climbing over 5% and reclaiming critical resistance levels. This movement not only signaled renewed investor confidence but also highlighted Bitcoin’s growing sensitivity to macroeconomic policy shifts—particularly around interest rates and monetary tightening cycles.
The rally reflects deeper trends in digital asset adoption, especially among institutional investors navigating shifting financial landscapes. As traditional markets brace for potential rate cuts in 2025, crypto markets are increasingly viewed as a strategic hedge against inflation and economic uncertainty.
👉 Discover how macro trends are reshaping crypto investment strategies today.
Bitcoin Jumps After Fed Signals Policy Shift
On August 24, Federal Reserve Chair Jerome Powell hinted at an upcoming adjustment in interest rate policy during his keynote address at the annual Jackson Hole Economic Symposium. While he stopped short of announcing immediate rate cuts, his tone was notably dovish—suggesting that the central bank may soon pivot toward easing monetary policy in response to cooling inflation and labor market softening.
Markets reacted instantly. Bitcoin price spiked upward, rising 5.12% within hours. According to Binance trading data, BTC reached a high of $64,955**, its strongest level since August 2. At the time of reporting, it was trading at **$64,212.91 per coin.
This surge came after weeks of sideways consolidation below the $60,000 mark—a level many analysts considered psychologically significant. Just hours before Powell’s speech, Bitcoin hovered near $60,000, with some mining operations reportedly operating at a loss due to high break-even costs (estimated by analysts at around $72,224 per BTC). That context made the sudden rally even more impactful.
U.S. Investor Demand Fuels Premium Spike
A key indicator of growing domestic appetite emerged shortly after the Fed’s comments: the Coinbase Premium Index (CPI) hit its highest level in 39 days.
Julio Moreno, Research Head at Crypto Quant, noted on social media that U.S. investor demand for Bitcoin surged following Powell’s remarks. The CPI measures the price difference between Coinbase and Binance, serving as a proxy for U.S.-based buying pressure. When the index rises, it typically indicates stronger demand from American investors who prefer regulated exchanges like Coinbase.
Historically, movements in this index have preceded major price shifts. For example, just before the "Crypto Black Monday" event on August 5—when Bitcoin dropped below $50,000—the premium fell below -0.10, signaling heavy selling pressure from U.S. investors.
Now, with the index rebounding sharply, analysts interpret this as a sign of renewed institutional and retail interest in Bitcoin amid favorable macro expectations.
👉 See how real-time data can help you anticipate market moves like this one.
Short Squeeze Wipes Out Bearish Traders
The rapid ascent triggered a massive short squeeze across major derivatives platforms. According to Coinglass data, over the past 24 hours:
- Approximately 63,000 traders were liquidated
- Total liquidation volume reached $175 million
- $134 million of that came from long liquidations, though short positions also suffered heavily
Notably, short liquidations hit their highest level since early August, underscoring how quickly bearish sentiment collapsed after the Fed’s dovish signal.
Many traders had positioned for continued downside, especially given miner stress and prolonged consolidation below $60,000. But Powell’s speech disrupted those assumptions overnight.
Analyst Will Clemente previously observed that markets have treated sub-$60,000 Bitcoin as “on sale” over the past six months. Now, with momentum shifting upward, that narrative may be reversing—especially if rate cuts materialize in 2025.
Bitcoin vs. Ethereum ETF Flows: A Tale of Two Assets
While Bitcoin surged, the performance of spot cryptocurrency ETFs revealed another important trend: a growing divergence between Bitcoin and Ethereum ETF demand.
Spot Bitcoin ETFs have seen consistent inflows since mid-August. On Friday alone:
- Net inflow reached $251 million, the highest since July 16
- Major players like BlackRock’s IBIT, Fidelity’s FBTC, and Grayscale’s GBTC collectively attracted nearly $50 million
In contrast, spot Ethereum ETFs—despite launching to much fanfare—have struggled to maintain investor interest. Data from SoSovalue shows:
- Nine Ethereum ETFs recorded outflows for seven consecutive days starting August 15
- This marks the longest streak of sustained capital withdrawal since their July 23 launch
Noel Acheson, author of CryptoIs Macro Now, offered insight into this imbalance:
“Bitcoin is often the entry point for traditional investors into crypto. While Ethereum may catch up as diversification becomes more important, Bitcoin is likely to remain the preferred store of value in uncertain times.”
Stephen Ouillet, Co-Founder and CEO of FRNT Financial, added:
“It’s no surprise that crypto ETF investors are de-risking ahead of Jackson Hole and adjusting to new rate expectations. Bitcoin remains the safe haven within digital assets.”
This capital flow pattern reinforces Bitcoin’s role as a macro-driven asset—increasingly correlated with broader financial indicators like interest rate expectations and risk appetite.
👉 Explore how ETF flows influence crypto prices and where smart money is moving next.
Key Takeaways and Market Outlook
Several core themes emerge from this latest market move:
- Bitcoin is becoming more responsive to macroeconomic signals, particularly around interest rates.
- U.S. investor demand remains a powerful driver, visible through exchange-specific metrics like the Coinbase Premium Index.
- Spot Bitcoin ETFs continue to attract institutional capital, while Ethereum alternatives lag.
- Volatility can still trigger sharp liquidations, reminding traders of the risks in leveraged positions.
With inflation cooling and labor data showing signs of weakness, the stage may be set for actual rate cuts in 2025—potentially fueling further gains in risk assets like Bitcoin.
Frequently Asked Questions (FAQ)
Q: Why did Bitcoin rise after the Fed's speech?
A: Federal Reserve Chair Jerome Powell signaled a potential shift toward lower interest rates in response to economic cooling. Lower rates reduce the opportunity cost of holding non-yielding assets like Bitcoin, making it more attractive to investors.
Q: What is the Coinbase Premium Index?
A: It measures the price difference between Bitcoin on Coinbase (U.S.-focused) and Binance (global). A rising premium suggests stronger demand from U.S. investors, often preceding price rallies.
Q: Are Ethereum ETFs underperforming?
A: Yes. Since mid-August, spot Ethereum ETFs have seen seven straight days of outflows—the longest losing streak since launch—while Bitcoin ETFs continue drawing strong inflows.
Q: What caused the recent wave of liquidations?
A: A sudden 5%+ price jump triggered a short squeeze, wiping out bearish leveraged positions. Over $175 million in total liquidations occurred in 24 hours.
Q: Is Bitcoin now considered a macro asset?
A: Increasingly yes. Its price movements now closely follow changes in monetary policy expectations, inflation data, and risk sentiment—similar to gold or tech stocks.
Q: Could this rally continue into 2025?
A: If the Fed begins cutting rates as expected, and institutional inflows into Bitcoin ETFs persist, many analysts believe $70,000 or higher is achievable by mid-2025.
Core Keywords:
Bitcoin surge, Fed interest rate policy, spot Bitcoin ETF, Coinbase Premium Index, cryptocurrency market trends, macroeconomic impact on crypto, Jackson Hole symposium