Bitcoin climbed past $81,000 after Federal Reserve Governor Christopher Waller signaled support for leaving interest rates unchanged if inflation continues to improve. The remarks prompted a sharp repricing of expectations for the Fed’s next move and helped drive a broader risk-asset rebound.

The shift in rate expectations fed directly into crypto derivatives markets, where short sellers were forced out of positions as prices rose. More than $415 million in bearish crypto bets were liquidated over 24 hours, while total liquidations across the market exceeded $500 million.

Fed remarks reshape market expectations

The move followed comments from Waller indicating that he would be inclined to support keeping rates steady if incoming inflation data keeps moving in the right direction. Markets quickly adjusted to that signal, reducing the probability of a September rate increase.

According to the source report, September rate-hike odds tracked by CME FedWatch fell from 63.2% to 50.4%. At the same time, the 10-year US Treasury yield dropped to 4.73% from recent highs, adding support to a broader turn in sentiment across financial markets.

Short squeeze lifts crypto prices

Bitcoin’s rise above $81,000 triggered the largest pain on the bearish side of the crypto market. In the past 24 hours, liquidations across crypto derivatives topped $500 million, with roughly $415 million of that coming from short positions.

The rally extended beyond Bitcoin. Ether approached $2,500 after gaining about 2.2% over the same period, while XRP advanced roughly 6% as US equities also moved higher. At the time referenced in the source article, Bitcoin was trading around $81,608.

Resistance concerns remain

Despite the sharp move, analysts cited in the report warned that the advance may not yet confirm a lasting breakout. They pointed to $83,000 as an important resistance level for Bitcoin.

If the market fails to push through that area, the rally could prove to be a bull trap rather than the start of a sustained upward trend. The report also noted limited institutional appetite for spot buying as a reason for caution, suggesting that a rejection near resistance could indicate distribution instead of fresh momentum.

What the market is watching next

For now, the immediate focus is on whether inflation data continues to improve in a way that supports Waller’s preference for holding rates steady. That policy backdrop helped spark the latest move, but the durability of the rally may depend on whether markets continue to scale back expectations for tighter monetary policy.

In crypto, traders are also watching whether Bitcoin can build on its break above $81,000 and test the $83,000 zone identified by analysts. A clean move beyond that level would challenge the more cautious reading of the rally, while a stall below it would keep concerns about a temporary squeeze-driven surge in place.

Source: Cryptopolitan