Key Highlights

  • Bitcoin surged past $80,000, reaching approximately $80,270, marking a nearly 3% rise over the last 24 hours, with XRP, Ethereum, and BNB also experiencing gains amid a broader stock market upswing.
  • Federal Reserve Governor Christopher Waller indicated on Thursday that he might be in favor of maintaining current interest rates, which led to a decrease in the odds of a rate hike in September from 63.2% to 50.4%, according to CME FedWatch.
  • Data from CoinGlass reveals that over $500 million in crypto positions were liquidated in the past day, with more than $415 million attributed to short sellers forced to cover their positions due to rising prices.

The cryptocurrency market, which includes Bitcoin and altcoins such as Bitcoin, XRP, Ethereum, and BNB, is enjoying a bullish trend linked to movements in the U.S. stock market, spurred by recent remarks from the Federal Reserve, resulting in significant losses for short sellers.

On Thursday, Bitcoin climbed back above the $80,000 mark, trading at about $80,270, reflecting a nearly 3% increase over the previous 24 hours. Ethereum is approaching $2,500 with a 2.2% gain today, while XRP has surged by 6% within the same timeframe. This rally has led to at least $327 million in liquidated short positions in just the last hour, totaling over $415 million in the past day.

Myriad: What’s next for Bitcoin price? Make your prediction here.

The driving force behind this surge seems to be comments from Fed Governor Christopher Waller, who, during a Reuters NEXT Newsmaker interview, expressed he would be "inclined to support" keeping the Fed's benchmark interest rate steady if forthcoming inflation data continues to show improvement.

Market participants responded positively, as the likelihood of a rate hike during the Fed's meeting on September 15-16 fell to 50.4% from a previous 63.2%, based on the CME FedWatch tool, which assesses the probability of Fed actions based on futures prices. The yield on the 10-year Treasury, a key benchmark for borrowing costs, which had recently reached its highest level since November 2023, fell to approximately 4.73%.

This marks a significant turnaround from just a week ago when Fed Chair Kevin Warsh's hawkish speech at the Jackson Hole conference had pushed Bitcoin down to $76,877 and increased the odds of a rate hike to 56%. Thursday's rebound brings Bitcoin back to a level it has struggled to maintain multiple times this year.

Equity markets mirrored this trend. The Dow Jones Industrial Average rose by 453 points, or 0.9%, while both the S&P 500 and Nasdaq gained nearly 1%. Nvidia contributed to the tech sector’s strength by announcing a $13 billion acquisition of AI model hub Hugging Face, and Snowflake's stock surged following a better-than-expected earnings report.

Exciting day for NVIDIA and @huggingface.

Open models enhance safety and cybersecurity, promote innovation, and allow for customization. They empower developers, startups, universities, industries, and nations to harness AI.

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— Jensen Huang (@JensenHuang) September 3, 2026

An interest rate increase would mark the Fed's first since July 2023, when it raised the benchmark rate to a 22-year peak of 5.25% to 5.50% in an effort to combat inflation following the pandemic.

Higher rates typically increase returns on cash and bonds, diverting investments from riskier assets like stocks and cryptocurrencies, while also strengthening the dollar, which can adversely affect dollar-denominated assets like Bitcoin. Keeping rates steady alleviates this pressure, which is why traders interpreted Waller’s comments as favorable for risk assets rather than a signal to sell.

Short Sellers Face Significant Losses

The ongoing crypto rally is notably characterized by short sellers being forced to exit their positions rather than merely new capital inflow. According to CoinGlass, over $500 million worth of crypto positions were liquidated in the last 24 hours—positions that exchanges close when traders can no longer cover their losses—with $416 million of this amount coming from short positions anticipating a price drop, compared to only $92 million from long positions. More than 119,000 traders were liquidated during this timeframe.

Liquidation heatmap. Image: CoinGlass

The liquidation event occurred rapidly, with the majority of short positions being closed within the last hour: over $329 million in shorts were liquidated in that period, including $86 million from Bitcoin positions alone.

This phenomenon can be described as a short squeeze: as prices rise, short sellers must buy back their positions to mitigate losses, which in turn drives prices even higher. This mechanism was similarly responsible for a $570 million liquidation wave last month, when Bitcoin rebounded from around $57,000.

Upcoming Developments

Looking ahead, the next significant event is the release of the August jobs report from the Bureau of Labor Statistics on Friday morning, which will be the last major economic update before the Fed's meeting on September 15-16.

Waller anticipates limited changes, noting that job creation has averaged 60,000 per month through July, with the unemployment rate steady at 4.1%.

A disappointing jobs report would not be surprising, as July's jobs miss alone reduced rate hike expectations the previous month, illustrating how a single report can influence market sentiment as significantly as a Fed speech can.