Bitcoin Rally Accelerates After Surprise Fed Signal

Bitcoin (BTC-USD) surged back above $80,000 Thursday after dovish comments from Federal Reserve Governor Christopher Waller triggered a sharp reversal in rate expectations, weakened the dollar and sent Treasury yields lower.

The cryptocurrency jumped more than $2,400, moving from roughly $77,200 earlier in the session to as high as $80,477 before extending gains to around $80,841.

The catalyst came after Waller indicated he would favor keeping interest rates unchanged at the Fed's September 15-16 meeting if upcoming inflation data shows price pressures are cooling.

Following the remarks, the implied probability of a September rate hike fell by roughly 12 percentage points to 54.6%. The U.S. dollar index dropped 0.5%, bond yields declined and gold climbed 2.3%, creating a more favorable liquidity backdrop for Bitcoin.

The rally also pushed Bitcoin through an important technical level.

BTC broke above $78,670, which traders now view as a key near-term support zone. Its 200-period exponential moving average sits much lower at $73,638 and remains upward-sloping, suggesting the broader trend is still intact.

But the speed of the rally also creates some risk. Bitcoin's 14-period RSI jumped to 72.13, moving into overbought territory and increasing the possibility of a short-term pullback or retest of support.