Market Analysis on August 22, 2025

The most concerning event right now is the Jackson Hole annual meeting at 10 PM tonight. Since this is the meeting closest to the interest rate cut in September, there is a high probability that remarks concerning the next rate cut will be made. According to the current market consensus, a 25 basis point rate cut in September is highly likely. If Powell's speech tonight leans dovishly, the rate cut will basically be confirmed. In fact, Trump has already made enough efforts for this rate cut. I have pulled up the historical performance of the cryptocurrency market after past Jackson Hole meetings, showing more gains than losses.

The recent pullback in the cryptocurrency market is partly related to the US stock market, with the Nasdaq dropping from 21,800 points to 21,100 points. After reaching a new high, it has turned down again on the daily level, so it is understandable that Bitcoin and Ethereum are also experiencing pullbacks, especially since the main funds driving the Ethereum rally came from the US stock market. As for the larger pullback in Ethereum, it is mainly due to the fact that it had previously risen too much. For an investment target, volatility is closely related to market capitalization, and Ethereum's market cap is completely acceptable for this level of volatility. However, I personally believe that the impact of tonight's meeting is limited, unless clear statements regarding interest rate cuts are made. In fact, there is still nearly a month until the interest rate meeting on the 16th-17th of next month, which is filled with many uncertainties.
Back to the market, it is currently undergoing a sideways movement after a pullback. Bitcoin is temporarily holding at 112000, while Ethereum is oscillating around the support level of 4200. Considering the US stock market, the risk of further downward breaks is currently low; the question is when it can continue.