On August 22, 2025, at the highly anticipated Jackson Hole annual meeting, Federal Reserve Chairman Powell delivered an important monetary policy speech. This speech was widely interpreted by the market as leaning towards a dovish stance, suggesting that there may be interest rate cuts in the future. This signal immediately triggered a strong reaction in the risk asset markets, particularly notable in the encryption market.

The prices of Bitcoin and Ethereum surged, leading to a massive short liquidation in the cryptocurrency derivatives market in a short period, totaling over $320 million. This phenomenon fully demonstrates the direct impact of macroeconomic events on the cryptocurrency market.

Before Powell's speech, the market was generally filled with caution and tension, with most investors expecting the Federal Reserve to maintain a tough stance to address inflation. However, Powell emphasized the need to 'proceed with caution' in his remarks and hinted at the possibility of future rate cuts, which completely overturned the market's original expectations.

This event triggered a typical 'short squeeze' phenomenon. When most traders hold bearish positions, sudden positive news causes prices to rise rapidly. This forces short sellers to buy in to cover their positions and stop losses, further pushing prices up and creating a positive feedback loop.

Powell's speech once again highlighted the characteristics of Bitcoin and Ethereum as macroeconomic sensitive assets. This indicates that the short-term price fluctuations of cryptocurrencies are no longer solely influenced by internal industry factors, but are increasingly closely linked to the global macroeconomic situation. This event provides us with an important case for a deeper understanding of the dynamics of the cryptocurrency market, while also reminding investors to closely monitor the potential impacts of changes in global economic policies on the market.