Bitcoin Traders Position for Jackson Hole: What Powell’s Big Speech Could Mean for Crypto
By Crystal Kim
As Federal Reserve Chair Jerome Powell prepares to deliver his crucial speech on Friday morning at the Jackson Hole Economic Policy Symposium, bitcoin traders are adjusting their positions in anticipation of his remarks. The cryptocurrency market is notably on edge, with many investors bracing for a potentially hawkish tone that could shape the near-term trajectory of digital assets.
Bitcoin Traders Taking Profits Ahead of Powell’s Speech
Bitcoin, the world’s largest cryptocurrency, has cooled off following a peak of $124,290 on August 14. As of Thursday afternoon, its price has dropped roughly 10%, reflecting traders’ cautious positioning ahead of Powell’s address. Market consensus generally expects the Federal Reserve to cut interest rates in September, but many crypto investors are skeptical that Powell will signal such a move, preparing instead for a more hawkish stance.
Sean Farrell, Head of Digital Asset Strategy at Fundstrat, pointed to the Coinbase-Binance spread as a key indicator of sentiment. The price discrepancy in spot bitcoin between the U.S.’s largest publicly traded exchange Coinbase and Binance, the world’s largest exchange, has shifted into discount territory. Farrell interprets this as a sign of “strong US spot selling.” He further noted that bitcoin options pricing across different time frames suggests risk aversion among traders, strengthening the view that Powell’s tone could lean hawkish.
The Impact of Federal Reserve Policy on Cryptocurrency
Powell’s speech could be pivotal not only for stocks but also for cryptocurrencies. Lower interest rates typically encourage investors to seek riskier assets, including stocks and digital currencies. Conversely, if Powell remains steadfast on tighter monetary policy, the momentum behind bitcoin’s recent rally could stall or reverse.
That said, the weakness seen in bitcoin leading up to the speech might set the stage for a rebound once the news is fully digested. Farrell summed up this possibility as “sell the rumor, buy the news,” suggesting that short-term volatility could give way to renewed buying interest post-speech.
Market Odds and Analyst Views on Rate Cuts and Bitcoin’s Outlook
The CME FedWatch tool shows a declining belief in a rate cut for September. Currently, futures contracts imply a 73% probability of a quarter-point rate reduction—down from 92% just a week ago. This diminished expectation adds to the market’s caution heading into Jackson Hole.
Despite the uncertainty, some analysts remain bullish on bitcoin’s longer-term prospects. Ned Davis Research’s Philippe Mouls and Pat Tschosik argue that bitcoin has yet to experience the “blow off top” that typically precedes major market declines, suggesting the ongoing “secular bull” run for bitcoin may still have legs.
However, they highlight some points of concern. Coinbase’s trading volumes show a growing share (55%) of non-bitcoin assets traded, the highest since late 2021, which could indicate shifting investor preferences. Furthermore, bitcoin has not seen a 50% price drawdown for 661 days, approaching its all-time record duration of 738 days without such a correction. These factors introduce some nervousness among market watchers.
Relationship Between Crypto and Equities
Fundstrat’s Tom Lee has observed that cryptocurrencies may serve as leading indicators for the stock market. In a social media post on Wednesday, Lee noted that bitcoin (BTC) and ethereum (ETH) appeared to bottom, signaling a potential rebound in equities by Friday.
What to Watch for at Jackson Hole
Powell’s speech at the televised, high-profile Jackson Hole Economic Policy Symposium is set to influence market sentiment. Investors will be listening closely for any clues on future interest rate policy, signaling whether the Fed is likely to ease or maintain tightening.
For crypto traders, this event could either confirm hopes of rate cuts that boost risk assets or trigger a flight to safety on signs of continued monetary restraint. As a result, bitcoin’s price action in the hours and days following the speech will be closely watched as a barometer for broader market direction.
Crystal Kim is a New York-based markets and investing reporter with over a decade of experience, having contributed to Barron’s, Bloomberg, Axios, and now Investopedia.
Sources:
- Sean Farrell, Fundstrat Digital Asset Strategy
- CME FedWatch Tool
- Ned Davis Research
- Social media commentary from Tom Lee, Fundstrat
This article reflects information available as of August 21, 2025.