Crypto Market Pulse - August 26, 2025

LAST WEEK RECAP:

What a rollercoaster of a week. Flows early on were dominated by broad-based de-risking as markets continued to digest the hotter PPI print from the prior week and positioned ahead of Jackson Hole. The FOMC minutes, released midweek, only added fuel to the fire, with a distinctly hawkish tone—most Fed officials stressing that risks still outweigh employment risks. In an environment where inflation remains sticky and unemployment risks are creeping higher, that stance suggested rate cuts may not be on the near horizon.

Rate cut odds slipped as low as 75%, dragging the S&P down to 6,350 from a high of 6,489, while BTC fell to $111,600 and ETH to $4,067. It looked like another week of risk-off positioning.

But Jackson Hole flipped the script. Many assumed the hawkish minutes were a preview, only to be wrong-footed. Powell delivered a speech that came across as notably dovish. He acknowledged risks on both sides but stressed the likely temporary nature of tariff-driven inflation pressures, and crucially remarked that “the shifting balance of risks may warrant adjusting our policy stance.” That single line was enough to light a fire under markets. The S&P ripped 1.5% higher to ~6,480, BTC rebounded to 117k before settling back to 113k Monday, and ETH surged to fresh all-time highs at 4,956 over the weekend.

Looking forward, with geopolitical and tariff risks fading into the background, attention swings back to the macro tape. Every datapoint—especially on employment and inflation—will be picked apart as we count down to the anticipated return of Fed rate cuts in September.

• Canada Inflation Rate YoY 1.7% vs 1.8% expected, MoM 0.3% as expected.
• UK Inflation Rate YoY 3.8% vs 3.7% expected, MoM 0.1% vs -0.1% expected.
• Japan S&P Manufacturing PMI Flash 49.9 vs 49 expected.
• UK S&P Manufacturing PMI 47.3 vs 48.3 expected, Services PMI 53.6 vs 51.8 expected.
• US S&P Manufacturing PMI 53.3 vs 49.5 expected, Services PMI 55.4 vs 54.2 expected.
• Japan Core Inflation Rate YoY 3.1% vs 3% expected.
• FOMC Minutes showed the majority saw inflation risk outweighing employment risk.
• At the Jackson Hole meeting, Fed Chair Powell mentioned “the shifting balance of risks may warrant adjusting our policy stance,” which seemed to imply dovish undertones.
• The Fed has also returned to a framework of flexible inflation targeting, eliminating the average inflation targeting introduced in 2020, which let inflation run hotter to account for the years of lower inflation before.
• XPL, the native token of Stablecoin Infrastructure Plasma Foundation, launches pre-market perps trading- with implied FDV at 5.5Bn FDV (a 10x for most pre-sale participants).

BTC WEEKLY VIEW

On Friday, BTC saw a 4% rebound at the key 120k level, but the weekly candle still closed down 3%, keeping the overall outlook weak. We need to pay close attention to the neckline at 120k — either price breaks below to extend the decline, or it reverses here to retest the 120k supply zone.

ETH WEEKLY VIEW

After reaching a new all-time high last week, ETH has since pulled back, suggesting that the rally may have been a false breakout. The price is currently consolidating around the short-term trendline near 4.3k, but a sustained move lower could signal the start of a new downtrend.

ETH/BTC

ETH/BTC continues to trend steadily above the 10-day MA, showing that ETH’s strong momentum remains intact.

TOTAL3 USD MARKET STRENGTH

Total3 has returned to the previous high supply zone and is forming what looks like a base. We need to closely watch whether it can break through the 1.09T resistance level.

TOTAL3 BTC MARKET STRENGTH

From the Total3/BTC perspective, BTC’s relative weakness against both Total3 and ETH is very evident. As long as the upward trend remains intact, a breakout above the previous high in Total3 looks likely.

MARKET LEVERAGE RATIO

Looking at the market leverage ratio, capital positioning appears highly conflicted, with price action remaining very choppy. Combined with BTC’s weakness, part of the market is seeking safety, while another part is chasing the upside momentum in ETH and TOTAL3. Until we see a decisive breakout in either direction, the market is likely to remain range-bound.

SUMMARY

• Markets faced broad sell-offs driven by a hot PPI print and hawkish FOMC minutes, with Fed officials emphasizing inflation risks over employment, pushing rate cut odds to 75% and dragging S&P to 6,350, BTC to 111.6k, and ETH to 4,067.
• Jackson Hole Surprise: Powell’s dovish speech at Jackson Hole, highlighting temporary tariff-driven inflation and a potential policy shift, sparked a market rally, lifting S&P to ~6,480, BTC to 113k, and ETH to a new high of 4,956.
• With geopolitical and tariff concerns easing, markets now hinge on upcoming employment and inflation data as anticipation builds for potential Fed rate cuts in September.

DISCLAIMER:

The information in this report is for information purposes only and is not to be construed as investment or financial advice. All information contained herein is not a solicitation or recommendation to buy or sell digital assets or other financial products.

This post was prepared by Kairon Labs Traders Patrick Li, Travis Su, and Kenny Lee.

Edited by: Shirley Castro