Cryptocurrencies took a nosedive on Tuesday as Bitcoin (BTC) plunged below $114,000 amid jitters that Federal Reserve Chair Jerome Powell might drop a hawkish bombshell during his upcoming Jackson Hole speech this Friday. BTC hit a low of $113,700 during the early hours of the U.S. trading session, marking its weakest point in nearly a fortnight and a sharp 9% retreat from last Thursday’s peak above $124,000. Ether (ETH) wasn’t spared either, shedding 3.5% to slip below $4,200, while a host of other major altcoins like Chainlink (LINK), Avalanche (AVAX), and Aptos (APT) saw declines ranging from 4% to 6%. For more insights on the recent market movements, see our article on Bitcoin Drops Below $115K Amid Wave of Profit-Taking.
Cryptos in Freefall
The crypto market’s slump comes as traditional markets pivoted to a risk-off mode, with the Nasdaq and S&P 500 indices recording morning losses of 0.9% and 0.4%, respectively. As investors brace for potentially hawkish signals from Powell, the mood in the crypto space is decidedly cautious.
Crypto treasury firms are feeling the pinch, too. KindlyMD (NAKA), a BTC accumulator, cratered another 14% on Tuesday. Ethereum-centric companies like Bitmine Immersion (BNMR) and Sharplink Gaming (SBET) also took hits, down 10% and 8%, respectively. Since peaking at $124 in May following its pivot to an ether treasury strategy, SBET has nosedived roughly 85% to just $18.60.
Michael Saylor’s MicroStrategy (MSTR), often seen as the bellwether for institutional crypto adoption, dropped 5.7% on Tuesday and is down 37% from its record high late last year. However, it’s crucial to note that MSTR shares are still up more than 20-fold since Saylor began his BTC buying spree five years ago. Being the trailblazer has its perks, even during turbulent times.
Jackson Hole Jitters
The anticipation surrounding Powell’s Jackson Hole address is palpable. Previously, many investors were banking on a September rate cut from the Federal Reserve. However, that certainty has now wavered. Last week’s unexpectedly hot Producer Price Index (PPI) report has reignited inflation concerns, raising the specter of the Fed keeping rates steady. For a deeper understanding of the market’s nervousness, see our coverage on Crypto Bleeds Ahead of Powell’s Jackson Hole Speech — Eight Reasons Why Traders Are Nervous.
According to a recent Bank of America report, there’s a compelling case for the Fed to hold rates unchanged in September. “With inflation essentially stuck over the past year, the tariff pass-through that we still expect, and the labor supply story keeping the unemployment rate historically low, we still think there is a strong case for the Fed to remain on hold,” the analysts stated.
The CME FedWatch Tool reflects this shifting sentiment, with market participants now assigning an 85% likelihood of a 25 basis point rate cut next month, down from as high as 98% just last week.
The Road Ahead
As the crypto community steels itself for Friday’s Jackson Hole symposium, the question on everyone’s mind is: How will Powell’s remarks influence market dynamics? While the Fed’s future course remains uncertain, the ongoing volatility in both crypto and traditional markets suggests that investors are keeping their options open.
With BTC and ETH both experiencing significant price corrections, the coming days will likely prove pivotal for traders and investors alike. Whether this downturn is a mere blip or the start of a more prolonged bearish phase remains to be seen. But one thing’s for sure—market participants will be hanging onto Powell’s every word this Friday.
In a space notorious for its volatility, the interplay between macroeconomic indicators and crypto valuations continues to captivate. As we await Powell’s address, one can’t help but wonder: Will the crypto market find its footing, or are we in for more turbulence?
Source
This article is based on: Bitcoin Drops Below $114K, Ether Loses $4.2K as Jackson Hole Speech Might Bring Hawkish Surprise
Further Reading
Deepen your understanding with these related articles:
- Crypto Traders Eye Jackson Hole as Ether, XRP, Solana Drop Sharply in Retreat
- Bitcoin, Ethereum Fall as PPI Shock Squashes Hopes for Jumbo Rate Cut
- Volatility Vanishes Across Markets as Traders Brace for Powell’s Jackson Hole Speech
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
