Bitcoin Rally May Continue After Powell’s Dovish Tilt as Markets Remain Split on September Cuts

• Immediate market reaction: BTC jumped ~5% to $117K on Powell’s dovish tone, led by leveraged longs and derivatives inflows.

• Macro drivers: Powell flagged labor-market risks and the potential for policy adjustment, lifting the probability of a September cut.

• Flows and risk: About $300M flowed into Binance derivatives minutes after the speech; spot BTC ETFs recorded daily outflows of $23.15M.

Bitcoin rally after Powell speech: BTC surged ~5% to $117K after dovish Jackson Hole comments—track Open Interest, ETF flows, and U.S. jobless claims for next moves. Read more.

What caused Bitcoin’s rally after Powell’s Jackson Hole speech?

Bitcoin rally followed Fed Chair Jerome Powell’s dovish remarks at Jackson Hole, which increased market odds of a September rate cut and triggered rapid derivatives inflows and higher Open Interest. The move was driven primarily by leverage rather than broad spot demand, according to exchange flow data and ETF snapshots.

How did markets price a September rate cut?

After Powell flagged downside labor-market risk and the potential need to adjust policy, CME FedWatch odds for a 25bp cut in September spiked above 90%. Markets re-priced U.S. policy expectations quickly, shifting asset allocations into risk-on positions, particularly in crypto derivatives.

Key Takeaways

Bitcoin rallied about 5% on Friday after Powell’s dovish tilt. However, a few hours later, markets appeared split on the September rate cuts.

Bitcoin [BTC] bounced back about 5% to $117K immediately after a surprising dovish stance by Fed Chair Jerome Powell during the Jackson Hole Symposium on 22 August.

Source: BTC/USDT, TradingView

Powell said the near-term balance of risks included upside inflation risks and downside employment risks, noting that policy was in restrictive territory but might warrant adjustment as the balance of risks shifts.

“In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside—a challenging situation…Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”

How did derivatives and flows respond?

Shortly after the speech, CME FedWatch showed a sharp rise in the probability of a September cut. BTC price jumped from $111.6K to above $117K as leveraged bulls increased positions, evidenced by a sharp spike in Open Interest (OI).

Source: CME FedWatch Tool

Exchange flow metrics showed about $300 million funneled into Binance derivatives within minutes, amplifying the price move. CryptoQuant flow charts registered an Open Interest spike consistent with leveraged buying.

Source: CryptoQuant

By press time BTC cooled to roughly $116K as traders digested the event and profit-taking reduced immediate momentum.

What are market voices saying?

Industry participants offered mixed reads. Roshan Robert, CEO of OKX U.S., told COINOTAG that rate cuts would likely revive investor appetite and deepen markets. He said rate cuts “unlock investor appetite” and could push crypto from a hedge into a core allocation as liquidity returns.

Conversely, Katalin Tischhauser, Head of Research at Sygnum Bank, described Powell’s message as contradictory, noting that the Fed chair highlighted both unemployment risk and a labor market in good shape, which clouds the clarity of any imminent cut.

What to watch next week?

Spot ETF flows and macro data will be key. Spot BTC ETFs recorded a daily outflow of $23.15M on Friday, taking weekly outflows to $1.17B, while the Coinbase Premium Index showed weaker retail demand—signals that the rally was leverage-driven rather than broad-based buying.

Source: CryptoQuant

Upcoming U.S. jobless claims on 28 August will be a focal macro datapoint. Stronger-than-expected claims could reinforce Powell’s rationale for easing; lower claims may undercut cut expectations and increase volatility for BTC and other risk assets.

Frequently Asked Questions

Will Powell’s remarks cause a sustained Bitcoin bull run?

Powell’s comments raised odds of a September cut and sparked a leveraged rally, but spot ETF outflows and weak retail demand indicate the move lacks broad-based conviction. Sustained gains will depend on confirmation from U.S. labor data and persistent inflows into spot markets.

How did derivatives flows affect BTC price on the day?

Derivatives inflows—about $300M into Binance derivatives—and a spike in Open Interest amplified the rally as leveraged long positions pushed price higher in a compressed time window.

Conclusion

Bitcoin’s rally after Powell’s Jackson Hole remarks reflected rapid market repricing toward a potential September rate cut and was amplified by derivatives flows and leverage. While the short-term move pushed BTC toward $117K, ETF outflows and soft retail demand caution against assuming a durable breakout. Monitor U.S. labor data, derivatives OI, and spot flows next week for clearer direction.