Bitcoin’s explosive jump above $117,000 and Ethereum’s surge past $4,700 came within hours of Jerome Powell hinting that rate cuts could arrive as early as September 2025. One carefully worded signal from Jackson Hole has traders re-rating liquidity conditions, pushing crypto’s total market cap back above $4T. But the bigger question isn’t what just happened—it’s whether this is a durable breakout or a liquidity head-fake into resistance.

What just happened

Powell flagged a softening labor market and cooling inflation, with July CPI at 2.7% YoY (vs. 2.8% expected). Markets swiftly priced a 25–50 bps cut at the September FOMC, igniting risk-on flows. Bitcoin ran to $117k, Ethereum to $4.7k, while altcoins followed (SOL, XRP, DOGE modestly green). On-chain and TradFi liquidity aligned: Bitcoin spot ETFs posted strong inflows (one print at $403M in a single day), total BTC ETF AUM hit $149.7B (~6.46% of BTC mcap), and institutional signals (including a fresh nod from Allianz) reinforced credibility. Polymarket now assigns an 88% chance ETH tags $5k in 2025.

Why it matters for traders

In regimes where policy easing is credible, crypto tends to outperform as liquidity expands and carry costs fall. Spot ETFs amplify the impulse by converting macro optimism into mechanical buying flow. That combination often shifts market structure from range-bound to trend. But it also increases sensitivity to macro data surprises—especially inflation and labor prints that can delay cuts.

Levels, flows, and timing

Technicals and flows now matter as much as the macro story:

• BTC: Holding $117,000 is key support. A 4H/1D close above $120,000 opens a run toward the recent ATH near $124,000.
• ETH: Above $4,700 strengthens the uptrend; watch ETF creations and corporate treasury accumulation (recent +545k ETH) for confirmation.
• ETFs: Track net creations around the US cash open—sustained inflows validate breakouts; outflows into resistance often mark fades.
• Timing: Expect volatility around Fed speak, CPI/PPI, and labor data; liquidity pockets can widen spreads and trigger stop cascades.

Risks that can flip the script

A hotter-than-expected PPI (+0.9% MoM recently vs. 0.2% expected) challenges the disinflation narrative. If incoming data forces the Fed to lean less dovish, the market can quickly unwind risk. Crypto’s volatility means failed breakouts at known resistance levels can reverse sharply. Keep an eye on yields and the dollar—rising real rates typically pressure crypto.

Actionable takeaway

Trade the level, not the headline: only add risk on a confirmed break and hold above $120,000 (BTC) and $4,700–$4,850 (ETH) alongside rising ETF inflows; otherwise, respect resistance and keep stops tight below $117,000 (BTC) and recent swing lows on ETH.

Bottom line

Macro is finally swinging in crypto’s favor, but durability hinges on data and flows. Let price confirm the narrative, align with ETF demand, and manage risk around event volatility. The next decisive move likely comes on a clean break above $120k—or a rejection that tells you the rally needs more fuel.

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