The Federal Reserve Chairman Powell is about to deliver an important speech, which may have a profound impact on the encryption currency market. Market participants are closely watching Powell's remarks, anticipating the policy signals contained within.

First of all, any hint of a rate cut timeline could trigger significant market volatility. If Powell hints at a possible rate cut in September, this dovish signal could lead to a substantial increase in cryptocurrency prices. Currently, the market has high expectations for a 25 basis point rate cut in September. If this expectation is reinforced, it could lead to Bitcoin prices breaking through the $125,000 barrier. Conversely, if Powell emphasizes that inflation risks remain a primary concern, it could trigger a market correction, resulting in a decline in cryptocurrency prices.

Secondly, Powell's attitude towards the regulation of cryptocurrencies is also worth paying attention to. He has expressed support for creating a legal framework for stablecoins. If he mentions further measures for cryptocurrency regulation in this speech, such as clarifying ETF approval standards, it could have a significant impact on market sentiment. Past experiences have shown that favorable policies can significantly boost coin prices. For example, after the Ethereum ETF approval process was initiated in June this year, the ETH/BTC exchange rate rose by 28% in just two weeks.

Finally, the market sentiment is currently in a sensitive state. Options trading data shows that investors are taking a defensive posture. Data from the Deribit exchange reflects that the put/call ratio for contracts expiring on August 22 has risen to 1.33, with the largest open interest concentrated in put options at $110,000, indicating concerns about a short-term pullback in the market. If Powell's speech does not align with market expectations, it could exacerbate market volatility, leading to drastic fluctuations in cryptocurrency prices.

Overall, Powell's speech will undoubtedly become an important turning point for the encryption currency market. Investors should closely monitor the content of the speech and adjust their investment strategies in a timely manner based on the actual situation.