Fed’s Secret Crypto Boost? Powell Speech Sparks Bitcoin & Ethereum Rally
Powell Speech Sparks Crypto Rally: Did the Fed Quietly Fuel Bitcoin and Ethereum?
The crypto market experienced a sudden surge following Federal Reserve Chair Jerome Powell’s high-profile remarks at Stanford University, leaving traders both surprised and intrigued. While Powell himself refrained from commenting on interest rates, inflation, or the broader economy, behind-the-scenes liquidity injections by the Fed sparked a dramatic rebound across Bitcoin, Ethereum, Solana, and other leading cryptocurrencies. This unexpected market reaction has left analysts and retail investors scrambling to understand the underlying dynamics driving what many are now calling a “Bullisember” moment in the crypto markets.
Record Liquidity Injection Hints at Subtle Market Support
In the hours surrounding Powell’s speech, the U.S. Federal Reserve undertook one of its largest liquidity operations in years. According to New York Fed data, the central bank injected $13.5 billion through overnight repurchase agreements—a move that ranks as the second-largest single-day injection since the onset of the COVID-19 pandemic. Additionally, the Fed conducted another round of repo operations totaling roughly $26 billion, ensuring short-term funding availability across the banking system.
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| Source: FRED |
Historically, repo activity had remained relatively low from 2020 to 2024, rarely exceeding $1 billion in any given operation. By contrast, 2025 has seen multiple injections ranging from $3 billion to $10 billion, culminating in the December 1 spike. This data suggests the Fed is preemptively safeguarding liquidity despite not publicly addressing potential stress in the financial sector.
While Powell’s speech did not explicitly reference the economy or monetary policy, markets quickly connected the dots between his appearance and the Fed’s substantial liquidity operations. Investors interpreted this as a silent assurance that the Fed is poised to maintain support for financial markets.
Immediate Crypto Market Reaction
Before Powell took the stage, cryptocurrency markets were under pressure, with the total market capitalization dropping below $3 trillion. Fear and uncertainty around potential Fed commentary weighed heavily on traders. However, the post-speech reaction was swift:
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Bitcoin rose from $83,909 to $87,027, representing a 1% gain within 24 hours and a market capitalization of approximately $1.73 trillion.
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Ethereum, Solana, and other major altcoins also rebounded strongly, helping the global crypto market recover 0.24% within hours to reach $2.95 trillion.
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Analysts noted that the bounce was largely driven by sentiment rather than policy guidance, highlighting the market’s sensitivity to liquidity cues.
The surprising rebound underscores the significant role that liquidity operations play in shaping crypto market behavior. Even without explicit comments on rate adjustments, the Fed’s actions sent a signal interpreted as a bullish cue by investors, demonstrating how digital asset markets can respond to subtle institutional moves.
Technical Indicators Support Short-Term Recovery
Following the Powell speech, several technical indicators point to potential short-term strength in Bitcoin and Ethereum. The seven-day Relative Strength Index (RSI) for BTC fell to 35.17 prior to the rebound, signaling an oversold condition that historically precedes a bounce. Bitcoin also held above its 100-week simple moving average at $84,000, a key support level that has previously limited downside during extended market drawdowns.
Meanwhile, the Moving Average Convergence Divergence (MACD) histogram turned positive at +754.24, indicating that bearish momentum may be waning. Traders are now eyeing $88,000 as a critical resistance level, coinciding with the 50% Fibonacci retracement from recent price declines.
Macro Environment Adds Nuance to Market Outlook
Despite the crypto rebound, broader macroeconomic conditions continue to introduce caution. U.S. 10-year Treasury yields remain above 4%, which can limit Bitcoin’s appeal as a hedge against the dollar. Rising bond yields in Japan and ongoing concerns about Bank of Japan tightening also contribute to global risk asset pressure.
In addition, U.S.-based Bitcoin ETFs experienced $3.4 billion in outflows during November, removing a layer of institutional support. These dynamics suggest that while the Fed-induced liquidity injection sparked immediate gains, underlying macro conditions may temper further rallies.
Looking Ahead: December 10 Fed Meeting in Focus
The upcoming Federal Open Market Committee (FOMC) meeting on December 9–10 will likely be a pivotal moment for cryptocurrency markets. Due to a recent U.S. government shutdown, policymakers lack fresh economic data, leaving the committee divided. Estimates indicate:
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| Source: FedWatchTool |
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Up to five FOMC members may oppose further rate cuts.
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Three key members of the Fed’s Board of Governors reportedly favor cuts.
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Market pricing suggests an 87.2% probability of a 25-basis-point rate cut and a 12.8% chance of a 50-basis-point adjustment.
Currently, benchmark interest rates sit between 3.75% and 4.00%. Any reduction in rates would inject additional liquidity into financial markets, which could be a strong bullish signal for cryptocurrencies.
Conclusion: A Subtle Bullish Signal for Crypto
The Powell speech episode highlights an unusual dynamic: the Fed quietly supported liquidity while avoiding public commentary, yet markets reacted with a swift rebound. Bitcoin and other cryptocurrencies gained immediate traction, reinforcing the importance of liquidity and sentiment in market movements.
As investors digest these developments, attention is now squarely on the December 10 FOMC meeting. Depending on the committee’s decision, cryptocurrency markets could experience renewed momentum or face renewed caution. Either way, the Powell speech and associated liquidity operations demonstrate the delicate interplay between central bank actions and digital asset performance.
For traders and enthusiasts, understanding these signals is crucial, as the Fed’s subtle interventions can significantly influence crypto markets—even without a single word on monetary policy.
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