Bitcoin Surges to $80K as Fed Rate Pause Triggers $415M in Short Liquidations

What happened: Bitcoin rallied to near $80,270, briefly reclaiming $81,000 after Federal Reserve Governor Christopher Waller signaled he could support holding interest rates steady if inflation trends continue. This dovish shift drove a risk-on rally across both crypto and equities. Over $415 million in short positions were liquidated in 24 hours, with more than $500 million in total crypto liquidations and approximately 119,000 traders affected. The CME FedWatch tool showed September rate-hike odds dropping from 63.2% to 50.4% following Waller's remarks. Major equity indices also rose, with the Dow Jones up 453 points (+0.9%).

Why it matters: The surge was largely driven by a short squeeze rather than new spot buying, raising questions about the rally's sustainability if fresh demand does not materialize. While Waller's comments were influential, he is only one member of the FOMC, and the probability of a rate hike remains close to a coin flip. The event underscores how macroeconomic signals, especially from the Fed, continue to have outsized influence on crypto markets, with institutional players rapidly repositioning in response.

Source: Decrypt