Crypto sentiment returns to Greed as Bitcoin and Ether spike on Fed speech

Crypto sentiment returned to “Greed” on Saturday as the crypto market surged, following dovish comments from US Federal Reserve Chair Jerome Powell that raised speculation of a possible rate cut in September.

The Crypto Fear & Greed , which measures overall crypto market sentiment, rose to a “Greed” score of 60 on Saturday, up 10 points from Friday’s “Neutral” reading of 50, after briefly dipping into Fear earlier in the week. 

The rebound came after Powell’s speech at the annual Jackson Hole economic symposium on Friday, where he said that the current conditions in inflation and the labor market “may warrant adjusting” .

ETH is the “most rate-sensitive aspect of crypto”

After Powell’s speech, Bitcoin () surged 5% , liquidating $379.88 million in shorts. Meanwhile, Ether () reclaimed its 2021 all-time highs of $4,878, reaching as high as $4,851, representing an 11.51% increase over the 24 hours, to CoinMarketCap.

In an X post on the same day, Axie Infinity co-founder Jeffrey “Jiho” Zirlin Ether the “most rate-sensitive aspect of crypto.”

“As interest rates drop, the spread between what can be earned by depositing your stablecoins in DeFi vs. depositing your USD in a bank widens,” he said.

According to the CME FedWatch , 75% of market participants anticipate a rate cut at the Sept. 17 Fed meeting. Trading resource The Kobeissi Letter , “It appears Fed Chair Powell is setting the stage for a September rate cut.”

Historically, and make riskier assets like crypto more attractive.

Crypto market participants were expecting the surge

However, St. Louis Fed President Alberto Musalem Reuters on Friday that he still needs more time to decide whether he will support an interest rate cut.

“I will be updating my outlook and balance of risks all the way up and until two days, three days before the meeting,” he said.

Earlier in the week, anticipated a crypto market spike if Powell hinted at a rate cut.

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Author Jason Williams on Wednesday, if Powell “comes in soft and learns that rate cuts are likely, we turbo rip.” 

Crypto Banter trader Ran Neuner “Jackson Hole will shape crypto’s direction moving forward,” before adding, “Trump is pushing for a rate cut with good reason, but will Powell listen?”

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