Whale Sell-Off Erases Powell Rally In Bitcoin

Bitcoin reverses Powell-driven rally as whale triggers flash crash

Bitcoin (BTC) faced one of its most dramatic reversals in August 2025. Following Fed Chair Jerome Powell’s dovish speech at the Jackson Hole Symposium, BTC briefly rallied, sparking optimism among investors. But within less than 10 minutes, a flash crash wiped out the gains as a whale dumped 24,000 BTC, sending shockwaves through an already fragile market.

Powell hints at rate cuts ahead

In his remarks, Powell suggested that the Federal Reserve may begin cutting rates as early as September 2025, citing a cooling economy and persistent inflation risks. Markets interpreted this as bullish for risk assets, and BTC climbed to $114,600 shortly after the speech.

However, the rally was short-lived. The massive whale sell-off erased all upward momentum almost instantly.

The flash crash impact

Data from Timechainindex showed BTC plunging from $114,666 to $112,546 in minutes, with trading volumes spiking as the market absorbed the massive sell order.

Analysts noted that with on-chain liquidity weakening due to ETF outflows, the market is now more vulnerable to large trades than before.

Options market signals caution

Despite Powell’s dovish tone, options traders remained defensive. Funding rates flipped negative while put options outweighed calls, signaling hedging against further downside.

This suggests that unless ETF inflows or new institutional demand arrive, BTC could face more pressure in the near term.

Miner revenues under threat

Beyond the immediate volatility, Bitcoin miners are facing declining profits. With retail activity migrating to Solana and transaction fees dropping sharply, mining revenue is being squeezed. Some miners are already diversifying into AI or high-performance computing (HPC) hosting to sustain operations.

Without meaningful on-chain fee growth, sustaining Bitcoin’s security model could become a long-term challenge.

Short-term and long-term outlook

In the short term, BTC must defend the $112K–$113K zone. A breakdown could send it toward $110K, while renewed ETF inflows might lift it back toward $115K–$116K.

In the long run, institutional adoption remains the key driver. While Bitcoin’s fundamentals are intact, flash crashes and whale activity highlight the risks of over-reliance on thin liquidity.

Conclusion

The flash crash following Powell’s speech highlights a critical truth: crypto markets remain highly fragile and prone to sudden shocks. While Fed easing could support prices in the long run, the dominance of whales and shrinking on-chain demand continue to pose challenges for Bitcoin’s stability.

Disclaimer: This article is intended solely to provide information and market insights at the time of publication. We make no promises or guarantees regarding performance, returns, or the absolute accuracy of the data. All investment decisions are the sole responsibility of the reader.