Bitcoin and Ethereum retreat despite dovish Fed signals

Bitcoin extended its decline, slipping to as low as US$109,274, even as Federal Reserve Chair Jerome Powell hinted at a potential rate cut in the near term. The move followed a short-lived rally after Powell’s Jackson Hole remarks, which initially lifted investor sentiment before fading as traders reassessed the likelihood and timing of policy easing. The correction was driven by a mix of profit-taking, technical resistance, and shifting rate expectations.

Bitcoin briefly touched US$117,000 on Friday before reversing, with the formation of a lower high signalling fading momentum. A reduction in rate cut expectations, from 90% to 70%, added to the uncertainty. The sell-off was accelerated by reports of a large holder offloading 24,000 BTC (around US$2.7 billion), sparking a cascade of liquidations across derivatives markets. As I told The Block, this retreat underscores how multiple factors beyond macro signals - from large-holder activity to shifting rate expectations - are shaping sentiment.

Ethereum, which had recently outperformed Bitcoin, saw steeper losses. After hitting an all-time high of US$4,956 on August 24, ETH pulled back to around US$4,300. The move followed a doji candle formation, a sign of market indecision, with heavy resistance near US$4,800 weighing on price action. Seasonal patterns also played a role, as Ethereum has historically underperformed in September.

Across the broader crypto market, liquidations topped US$900 million in a single session. Capital that had been rotating between Bitcoin and Ethereum is now shifting towards a broader de-risking stance. Thin weekend liquidity and heightened volatility amplified price swings, while retail traders turned more cautious.

Despite the setback, Ethereum continues to draw institutional attention, supported by ETF inflows and its relative strength versus Bitcoin. The key question now is whether this correction proves to be a pause within the broader uptrend, or the start of a deeper retracement. For the moment, the market remains defensive.

For more insights and market analysis, follow me on LinkedIn or X.

Disclaimer: The information provided on this page is issued by BTC Markets Pty Ltd (BTC Markets, we, us, our). The information is general only and is not intended to constitute an opinion or recommendation with respect to its contents. Past performance is not a reliable indicator of future performance. Any reference to past performance is intended to be for general illustrative purposes only. The information cannot be relied upon for any purposes and is not intended to be a substitute for professional advice.

The information does not purport to be complete, accurate or contain all of the information that a person may require to make a decision. It may also contain forward looking statements, which are subject to known and unknown risks, uncertainties, and other factors. We recommend you obtain professional advice before making any decision with respect to the matters discussed in this document. To the maximum extent permitted by law, BTC Markets will have no liability for any loss or liability of any kind: (i) arising in respect of the information contained (or not contained) on this page; or (ii) arising from a person relying on any information or statement contained on this page. The information provided is only intended for recipients in Australia. This information cannot be reproduced without our prior written permission.