Bitcoin reclaims $82K as crypto market cap climbs to $2.72 trn; Fed signals, short covering fuel rally

The cryptocurrency market witnessed strong buying momentum during Asian trading hours on Friday, with total market capitalisation rising 3.6% to $2.72 trillion, led by a sharp rebound in major digital assets Bitcoin and Ethereum.

Bitcoin, the most values crypto asset, reclaimed the $81,000 mark for the first time since May 2026 and briefly tested $82,000, while Ethereum climbed above $2,500. The rally came as easing concerns over US monetary policy improved risk appetite across global markets.

At the time of reporting, Bitcoin was trading at around $80,954, up about 4% over the past 24 hours, taking its market capitalisation to roughly $1.6 trillion. Ethereum was at $2,515.53, gaining around 4.5% in 24 hours, with a market cap of about $300 billion. XRP rose around 6% to nearly $1.44, giving it a market capitalisation of about $91 billion.

Over the past week, Bitcoin gained 4%, while Ethereum rose 4.74%. XRP climbed 5.38%, while BNB, Solana and Dogecoin also posted gains.

What fuelled the crypto rally?

The latest rally followed comments from Federal Reserve Governor Christopher Waller, who indicated that he would support leaving interest rates unchanged if there is no dramatic shift in inflation. The remarks helped ease concerns around the Fed's monetary-policy trajectory and lifted sentiment towards risk assets, including cryptocurrencies.

“The broad-based recovery suggests buying interest has returned across major assets, supported in part by easing expectations of a September Fed rate hike,” said Avinash Shekhar, Co-Founder and CEO of Pi42.

Shekhar said XRP's relative outperformance was particularly notable as the rally broadened beyond Bitcoin into large-cap altcoins.

Riya Sehgal, Research Analyst at Delta Exchange, also pointed to the breadth of the recovery, with gains extending from Bitcoin and Ethereum to major altcoins such as XRP, Solana and BNB.

Prateek Gupta, Head of Business at Mudrex, said Bitcoin had rallied from around $77,200 to above $81,000 after Waller signalled support for keeping rates unchanged at the upcoming Federal Open Market Committee meeting if inflation continues to ease.

The shift pushed September rate-hike expectations down 12 percentage points to 54.6%, while the dollar weakened, further improving the appeal of risk assets, Gupta said.

Bitcoin's correlation with gold has also strengthened, reaching its highest level since 2020, he added.

However, Gupta cautioned that unusually extreme fund flows over six consecutive days could signal some near-term vulnerability. Bitcoin needs to clear the $83,000 resistance level, while support has moved up to around $78,000.

Short covering adds momentum

The rally was further amplified by heavy liquidations in the crypto derivatives market. Around $691 million worth of crypto positions were liquidated over the latest 24-hour period, up 166% from the previous day, according to Sehgal.

The sharp rise in liquidations alongside higher prices suggests that forced short covering contributed significantly to the rally. As bearish positions were closed, the resulting buying pressure accelerated the upward move.

“Leverage appears to have amplified the rally,” Sehgal said, adding that the surge in liquidations alongside rising prices pointed to significant forced short covering.

Market sentiment has also improved sharply. The Crypto Fear & Greed Index climbed to 78, placing sentiment firmly in the “greed” territory.

Bitcoin faces resistance at $82,000–$84,000

Despite the strong rebound, analysts expect Bitcoin to face stiff resistance at higher levels. Sehgal said the immediate resistance zone is around $82,000–$84,000. A pullback towards $78,000–$78,900 could test the strength of the breakout, while upcoming US employment data could determine whether the recovery gathers further momentum or loses steam.

Balaji Srihari, VP-Business, India, at CoinSwitch, said Bitcoin's move above $81,000 was supported by US spot ETF inflows and Strategy returning to the market as a buyer.

“The broader trend remains positive, with BTC trading above its key moving averages,” Srihari said.

However, momentum indicators suggest the rally may be stretched. Bitcoin's daily Relative Strength Index (RSI) has moved above 73, while the hourly RSI is above 80, pointing to overbought conditions.

Srihari said some short-term consolidation or a pullback could be healthy for the market. The $80,000 level remains a key support zone, while a decisive move above $83,000 could open the way for further gains.

Shekhar advised investors against chasing sharp intraday moves and suggested staggered entries, while keeping an eye on whether Bitcoin can sustain levels above $80,000 and Ethereum can hold the $2,500 zone.

For now, the crypto market's technical structure has improved, but the sharp rise in leverage-driven liquidations and overbought momentum indicators suggest that volatility could remain elevated.

The next major trigger is likely to be US employment data, which could influence expectations around the Federal Reserve's policy path and determine whether Bitcoin's latest breakout develops into a sustained recovery.