Ethereum just delivered its biggest single-day rally in months, soaring 12% to $4,738.91 as Federal Reserve Chair Jerome Powell's Jackson Hole speech triggered a massive short squeeze and sent crypto traders scrambling to reverse their bearish bets. The surge puts ether within striking distance of its 2021 all-time high of $4,866, marking a dramatic reversal from Tuesday's $4,000 lows.
Ethereum just exploded higher in what traders are calling a textbook short squeeze, with the world's second-largest cryptocurrency rocketing 12% to $4,738.91 after Federal Reserve Chair Jerome Powell's surprise dovish pivot at Jackson Hole. The dramatic reversal came as Powell declared that "the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance," signaling September rate cuts are now on the table.
The timing couldn't have been more brutal for bearish traders. According to CoinGlass, ether saw approximately $120 million in short liquidations within a single hour of Powell's remarks, creating a cascading effect as leveraged positions unwound. "Traders seem to have been caught completely off-sides by Powell's dovish comments today," Selini Capital CEO Jordi Alexander told CNBC via the original report. "The market positioning in recent sessions has seen clear risk-off moves in assets like crypto and tech, and today's setting up of a September rate cut is causing a panicked repositioning."
The liquidation mechanics tell the story of a market caught wrong-footed. When traders short ether with leverage and prices surge, they're forced to buy ETH back to close positions, creating additional buying pressure that pushes prices even higher. This feedback loop turned Powell's policy hint into a crypto market earthquake, with Bitcoin also climbing 3% to $116,191.09 in sympathy.
Crypto treasury stocks, which had been hammered earlier this week during the tech rotation, bounced hard alongside the underlying assets. Coinbase advanced 6%, while stablecoin issuer gained 7%. Even more dramatic moves hit the smaller treasury plays: and jumped 14% and 12% respectively, while Solana-focused surged 19%.
