Crypto Markets Rally as Powell Hints at September Rate Cut; Ether Nears $5K, Bitcoin Climbs
August 23, 2026 — The crypto market staged a powerful rebound Friday after Federal Reserve Chair Jerome Powell struck a surprisingly dovish tone during his speech at the Jackson Hole symposium. His comments drove renewed optimism across risk assets, fueling double-digit gains in top cryptocurrencies.
Powell Opens the Door to Looser Policy
In one of his most closely watched addresses of the year, Powell emphasized growing concerns around labor market softness and signaled that interest rate cuts may be appropriate in the near term.
“Downside risks to employment are rising,” Powell said, adding that President Donald Trump’s tariffs may have only a temporary impact on inflation.
“With policy in restrictive territory, the evolving risk landscape may warrant an adjustment to our stance,” he noted.
Markets responded swiftly. The likelihood of a September rate cut surged to 90%, sparking a sharp rally in equities and digital assets.
Ether Breaks Out, Eyes $5,000
Ethereum (ETH) soared to a record $4,885 on Coinbase, leading the crypto market with a 15% gain over the past 24 hours. As of writing, it was trading just above $4,700.
Bitcoin (BTC), though also higher, posted a more modest 4% increase, hovering near $115,600 after briefly touching $117,400.
“Our base case now includes a breakout to $5,000+ for ETH,” said Sam Gaer, CIO of Monarq Asset Management. “Market internals are healthy, and treasury demand is accelerating as several deals from summer start to close.”
ETH derivatives saw a spike in bullish bets, with options data from Deribit showing strong demand for upside exposure. BTC options, while active, were less aggressive.
BTC Remains Strong, Despite Pullback
Bitcoin continues to show resilience, with data suggesting large holders are accumulating.
“The recent BTC pullback was just under 10% — far smaller than previous drawdowns this year. Whale wallets are accumulating near the $113K mark,” Gaer added.
Multiple Rate Cuts Expected
Spencer Yang, managing partner at BlockSpaceForce, said Powell’s shift likely marks the start of a longer easing cycle.
“We expect the first cut in September and several more into year-end,” he said. “The top five tokens — BTC, ETH, BNB, SOL, LINK — are positioned to benefit across different crypto sectors.”
Spot ETF Flows Take Center Stage
Steve Lee, co-founder of Neoclassic Capital, welcomed Powell’s comments but warned that continued ETF inflows are essential for sustaining momentum.
“This move is constructive in the short term. But whether it sticks depends on institutional flows into BTC and ETH ETFs, especially after the weekend,” he told CoinDesk.
Lee is tracking newer layer-1 projects like Base, Monad, Story, and SUI. Gaer, meanwhile, is focused on the Solana ecosystem, highlighting JITO, JUP, Raydium, and PUMP as strong performers.
Caution Flags: Corporate Adoption and Market Fragility
While Powell’s comments catalyzed a rally, analysts warned of emerging risks tied to the corporate use of digital assets and broader market volatility.
“We’re seeing cracks in the quality of Digital Asset Treasuries,” Lee said. “Some recent deals show weak compliance, poor banking relationships, and inflated structures — early signs of froth.”
More than 100 publicly traded firms now hold a combined 984,971 BTC, following the trend first set by Strategy in 2020, per Bitcoin Treasuries. But analysts warn that the rapid pace of corporate adoption carries systemic risk.
“The trend is powerful but needs scrutiny,” Lee added.
Gaer also highlighted concerns about potential shocks from equity markets or geopolitical developments that could weigh on crypto sentiment.
