Crypto sentiment returned to “Greed” on Saturday because the crypto market surged, following dovish feedback from US Federal Reserve Chair Jerome Powell that raised hypothesis of a potential fee lower in September.
The Crypto Fear & Greed Index, which measures general crypto market sentiment, rose to a “Greed” rating of 60 on Saturday, up 10 factors from Friday’s “Neutral” studying of fifty, after briefly dipping into Fear earlier within the week.
The rebound got here after Powell’s speech on the annual Jackson Hole financial symposium on Friday, the place he mentioned that the present situations in inflation and the labor market “might warrant adjusting” the Fed’s financial coverage stance.
ETH is the “most rate-sensitive facet of crypto”
After Powell’s speech, Bitcoin (BTC) surged 5% to $117,300, liquidating $379.88 million in shorts. Meanwhile, Ether (ETH) reclaimed its 2021 all-time highs of $4,878, reaching as excessive as $4,851, representing an 11.51% enhance over the 24 hours, in accordance to CoinMarketCap.
In an X publish on the identical day, Axie Infinity co-founder Jeffrey “Jiho” Zirlin referred to as Ether the “most rate-sensitive facet of crypto.”
“As rates of interest drop, the unfold between what might be earned by depositing your stablecoins in DeFi vs. depositing your USD in a financial institution widens,” he mentioned.
According to the CME FedWatch Tool, 75% of market members anticipate a fee lower on the Sept. 17 Fed assembly. Trading useful resource The Kobeissi Letter mentioned, “It seems Fed Chair Powell is setting the stage for a September fee lower.”
Historically, Fed fee cuts enhance liquidity and make riskier property like crypto extra engaging.
Crypto market members had been anticipating the surge
However, St. Louis Fed President Alberto Musalem instructed Reuters on Friday that he nonetheless wants extra time to resolve whether or not he’ll assist an rate of interest lower.
“I will likely be updating my outlook and steadiness of dangers all the way in which up and till two days, three days earlier than the assembly,” he mentioned.
Earlier the week, a number of crypto market members anticipated a crypto market spike if Powell hinted at a fee lower.
Related: Bitcoin worth breakout to $117K liquidates bears, opening door to recent all-time highs
Author Jason Williams mentioned on Wednesday, if Powell “is available in smooth and leans that fee cuts are probably, we turbo rip.”
Crypto Banter dealer Ran Neuner mentioned “Jackson Hole will form crypto’s course transferring ahead,” earlier than including, “Trump is pushing for a fee lower with good motive, however will Powell hear?”
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