Bitcoin Surges Past $80,000 on Dovish Fed Signal

A surprise signal from Federal Reserve Governor Christopher Waller sparked a sharp reversal in rate expectations on Thursday, sending Bitcoin's price surging above $80,000. In comments that caught market participants off guard, 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.

The implied probability of a September rate hike fell by roughly 12 percentage points to 54.6% after Waller's remarks, leading to a weakening of the U.S. dollar index and declines in bond yields. Gold prices climbed 2.3%, creating a more favorable liquidity backdrop for Bitcoin.

Bitcoin's price jumped over $2,400 from around $77,200 earlier in the session to as high as $80,477 before extending gains to around $80,841. The cryptocurrency also broke above an important technical level at $78,670, which traders now view as a key near-term support zone.

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