How Will the Crypto Market React to FOMC Meeting and Powell’s Jackson Hole Speech?

The crypto and stock markets are moving cautiously this week as investors await key signals from the U.S. Federal Reserve. Bitcoin has slipped to around $113,350, down 2% in a day and nearly 9% from its recent peak, while Ethereum trades near $4,156 with double-digit weekly losses. Altcoins like XRP and Cardano are also under pressure. 

Sentiment has shifted from Greed (56) last week to Fear (45) today, with traders weighing whether the Fed will remain dovish or turn hawkish, setting the tone for both traditional and digital assets in the days ahead.

Major U.S Economic Events This Week

Looking at the current market sentiment, crypto analyst Alvaro Mysterio pointed to two key events this week: the FOMC minutes on Wednesday and Fed Chair Jerome Powell’s speech at Jackson Hole on Friday. He outlined possible scenarios from bullish rallies to bearish pullbacks, while noting what investors should realistically expect.

FOMC Minutes – Wednesday

In a bullish scenario, if the minutes strongly reinforce the likelihood of a 25-basis-point cut in September, or even hint at the possibility of a larger 50-bp cut, stocks could catch a bid. Mysterio notes that rate-sensitive sectors like technology would benefit the most, with the S&P 500 (SPY) rising 1–2%. Crypto would likely see some upside as well, as looser policy tends to improve risk sentiment.

On the bearish side, if the Fed stresses ongoing inflation risks from tariffs or shows less consensus on immediate cuts, it could weigh on markets. That might push the SPY down 1–3%, dragging risk assets like Bitcoin and Ethereum with it. However, he sees the most likely outcome as fairly modest, perhaps a 0.5–1% move higher, since investors are already pricing in a September cut, and a dovish tone would simply confirm expectations.

Powell Jackson Hole Speech – Friday

Powell’s speech is seen as the real market mover. A dovish message that stresses labor market risks and confirms a September cut could spark a broader rally, with SPY up 2–3% and small-cap stocks soaring as much as 10%. On the other hand, a hawkish warning about inflation could trigger steep losses, with the SPY dropping 3–7% and high-valuation tech stocks tumbling by over 10%. 

Still, Mysterio believes the most realistic outcome is a middle ground. Powell is unlikely to commit firmly, which means markets could simply churn, with the SPY swinging within ±1–2% as traders parse his words. A “sell-the-news” reaction also remains possible if investors are underwhelmed.

Conclusion 

For now, markets are holding their breath. Whether Bitcoin and Ethereum extend gains or retrace will likely depend on Powell’s tone. As Mysterio notes, this week’s Fed messaging could either ignite momentum or keep traders stuck in limbo.

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