Following Fed Chair Jerome Powell’s speech at the Jackson Hole conference, Binance futures experienced a significant uptick in trading activity. Within just 15 minutes of Powell hinting at a possible rate cut, Binance futures products saw a $300 million increase in trading volume, pushing Binance’s BTC Open Interest to approximately $13.3 billion. The total crypto Open Interest also surged by 8.5 percent to reach around $215 billion.
The sudden market shift also led to over $656 million in crypto derivatives being liquidated within the past 24 hours, highlighting the volatility and rapid movements in the cryptocurrency market.
Bitcoin price responded positively to Powell’s remarks, with the flagship coin rallying over 4 percent to trade above $117k during the mid North American session. This bullish sentiment extended to the wider altcoin industry, with Ethereum (ETH) leading the charge and pushing the total crypto market cap towards $4.12 trillion.
Meanwhile, traders on the Kalshi platform increased their bets on a potential 25 bps Fed rate cut in September to 79 percent, while reducing their stake on the Fed maintaining its rate between 4.25% and 4.5% to 18 percent. This shift in sentiment reflects the market’s anticipation of potential monetary policy changes in the near future.
Looking ahead, with renewed interest in Bitcoin from whale investors, a new bull market could be on the horizon in the coming weeks. However, for this positive momentum to continue, Bitcoin price must consistently close above $120k to dispel any lingering bearish sentiment towards the $108k level.
Overall, the cryptocurrency market remains highly responsive to external factors such as central bank policies and macroeconomic events, making it crucial for investors to stay informed and adapt their strategies accordingly.