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.What Bitcoin investors should watch nextThe immediate test is whether Bitcoin can hold above $78,670.If buyers defend that level, the next resistance zone sits between $81,300 and $81,800. A sustained move above $82,000 could open a path toward the mid-$80,000 range.A breakdown below $78,670 would raise the risk of a retreat toward $76,000 to $77,000, with deeper support around $74,450 and $73,638.The macro backdrop remains just as important. August jobs data, inflation readings and changing Fed expectations could quickly reshape the rate outlook.One longer-term development is also worth watching: Bitcoin's 90-day correlation with gold has climbed to its highest level since 2020, while its recent correlation with the S&P 500 has fallen close to zero. That strengthens the argument that investors are increasingly trading Bitcoin as a scarce monetary asset rather than simply another high-beta technology trade.