Crypto Market Drops $120B as Powell’s Jackson Hole Speech Looms

The cryptocurrency market saw a sharp decline on Wednesday, losing nearly $120 billion in value within 24 hours. The downturn pushed global market capitalization to $3.86 trillion, the lowest level in two weeks, as traders reduced exposure ahead of Federal Reserve Chair Jerome Powell’s Jackson Hole speech on Friday.

Bitcoin and Ethereum led the decline, with both tokens falling to multi-week lows. The sell-off reflects rising concerns that Powell may deliver a hawkish message, reducing expectations for a September rate cut and weighing on risk assets like cryptocurrencies.

Fed Policy in Focus

Crypto analyst Jason Williams said markets are “pricing in a hawkish tone” ahead of the Jackson Hole remarks. He explained:

• A dovish Powell → markets could stage a sharp rebound.
• A hawkish Powell → selling pressure may last 4–6 weeks until the Fed’s October meeting.

The CME FedWatch Tool still shows an 85% chance of a September 17 rate cut, but that probability could fall quickly if Powell signals caution.

Meanwhile, Donald Trump criticized Powell, claiming inflation is no longer a problem and that the Fed is “too late” in delivering a needed rate cut.

BREAKING: President Trump asks for somebody to “inform Jerome ‘Too Late’ Powell that he is hurting the housing industry.” pic.twitter.com/jJY4lMg22J

— The Kobeissi Letter (@KobeissiLetter) August 19, 2025

Bitcoin and Ethereum Slide Lower

• Bitcoin (BTC): Fell below $113,000, its lowest level in 17 days.
• Ethereum (ETH): Dropped under $4,100, erasing last week’s gains.

Both assets reflect the market’s sensitivity to Fed policy expectations and broader risk sentiment.

Sentiment Turns Bearish

• Market Outlook: Analysts describe conditions as an “uncomfortable equilibrium,” with traders reluctant to make big moves until Powell provides clarity.
• Volatility: Bitcoin Magazine founder David Bailey said BTC sentiment “flickers like a flame—joy one moment, panic the next.”
• Retail Trends: Blockchain analytics firm Santiment reported the most bearish social sentiment since June, when geopolitical tensions triggered panic selling.

Bitcoin Outlook Ahead of Powell

At the time of writing, BTC had recovered slightly to $113,520. Still, its near-term direction depends almost entirely on Powell’s speech at Jackson Hole. A dovish tone could spark renewed buying, while a hawkish stance risks extending the correction across crypto markets.

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