Ethereum Extends Rally to Fresh Record Above $4,950 Following Powell's Rate Cut Signal

Ethereum extended its rally to a fresh all-time high of $4,954.81 on Sunday, building on momentum from Federal Reserve Chair Jerome Powell's dovish Jackson Hole comments that signaled potential interest rate cuts ahead.

The second-largest cryptocurrency has shown remarkable resilience since Powell's Friday remarks, initially surging to break its 2021 record before consolidating and then pushing to new peaks over the weekend. At publication time, Etherum was trading at $4,719, down 1.45% in 24 hours, but still reflecting strong underlying demand following the Fed chair's policy pivot. The pullback coincided with $210 million in leveraged long positions being liquidated, triggering cascading sales that pushed Ethereum below the psychologically important $4,800 level.

Bitcoin fared worse, declining 2.19% in 24 hours to $112,502 as it extended a seven-day losing streak to 2.74%. The flagship cryptocurrency briefly erased all gains from Friday's Powell-driven rally, touching a low of $110,779, its weakest level since July 10.

The crypto market's initial surge Friday came after Powell indicated the Federal Reserve was prepared to cut interest rates at its September meeting. "The baseline outlook and the shifting balance of risks may warrant adjusting our policy stance," Powell told attendees at the Jackson Hole Economic Symposium.

Ethereum's response was particularly dramatic, with the token surging nearly 7% to $4,600 within minutes of Powell's remarks, briefly touching new record territory before consolidating. The cryptocurrency then built on those gains through the weekend, ultimately reaching $4,954.81 on Sunday in a demonstration of sustained bullish momentum. However, the momentum proved short-lived.

Ethereum's recent outperformance relative to Bitcoin reflects several structural tailwinds. Nearly one-third of Ethereum's supply is locked in staking contracts, creating artificial scarcity, while corporate treasuries have begun accumulating the token for yield generation.

Over the weekend, Bitmine Immersion Technologies, chaired by Wall Street strategist Tom Lee, purchased $45 million worth of Ethereum, according to blockchain analytics firm Arkham Intelligence.

Technical analysis suggests Ethereum faces resistance near its weekend highs, with the Relative Strength Index indicating overbought conditions.

Bitcoin's decline was exacerbated by miner selling, with mining operations liquidating 5,066 BTC worth approximately $569 million near yearly highs. The selling pressure contributed to Bitcoin breaking below critical support at $118,859, triggering additional automated liquidations.

Despite Monday's retreat, both cryptocurrencies remain well above levels seen before Powell's Jackson Hole appearance, suggesting the Fed chief's comments continue to underpin medium-term sentiment. Market participants are now focused on upcoming economic data and the Fed's September 18 policy meeting for further clarity on the central bank's rate trajectory.