Bitcoin Surpasses $81,000 Amid Uncertainty Over Fed Rate Hikes

Bitcoin has returned above $80,000.

This time, the market rally wasn't driven solely by crypto sentiment. More accurately, it was propelled by a combination of easing expectations for Fed rate hikes, declining U.S. Treasury yields, a weaker dollar, ETF capital inflows, and prior short-covering.

BiyaPay market data shows that, as of September 4, BTC briefly surged above $81,000, posting a 24-hour gain of approximately 4%. ETH also rebounded, returning to around $2,500. Meanwhile, several popular tokens such as Zcash, XRP, and HYPE strengthened, and related crypto stocks including Coinbase, Robinhood, and Strategy rose in tandem.

This time, the market rally wasn't driven solely by crypto sentiment. More accurately, it was propelled by a combination of easing expectations for Fed rate hikes, declining U.S. Treasury yields, a weaker dollar, ETF capital inflows, and prior short-covering.

What’s being traded isn’t the isolated price action of a single cryptocurrency, but rather a recovery in risk appetite. However, recovery does not equal a reversal. After BTC reclaimed $80,000, the real question has become whether this level can be sustained.

In this stage where multi-asset interconnectivity is becoming increasingly evident, platforms like BiyaPay’s global one-stop asset allocation solution are more readily used for cross-market trend analysis. It covers multiple asset scenarios including digital assets, U.S. stocks, Hong Kong stocks, and fiat currency exchanges, enabling simultaneous monitoring of price movements across assets such as BTC, ETH, U.S. stocks, and Hong Kong stocks. Particularly when Bitcoin, U.S. Treasuries, the U.S. dollar, and tech stocks move in tandem, focusing on just one market can easily cause you to miss the true underlying driver of price changes.

This round of Bitcoin's sudden rebound above $80,000 was most directly triggered by a shift in Fed expectations.

Previously, the market had been concerned that the Federal Reserve might raise rates again at its September meeting. U.S. Treasury yields rose, the dollar strengthened, and risk assets generally came under pressure, with Bitcoin oscillating repeatedly around $76,000 to $78,000. However, Federal Reserve Governor Waller recently expressed a cautious stance, noting that if inflation continues to moderate, he would favor maintaining interest rates unchanged.

This statement prompted the market to repricing. Data shows that the probability of a September rate hike has dropped from over 60% earlier this week to around 48%, essentially returning to a 50-50 split. As interest rate expectations shifted, U.S. Treasury yields declined, the dollar weakened, and capital flowed back into risk assets—with Bitcoin reacting the fastest.

Here, "evenly matched" does not mean the Fed has definitively decided against raising rates, but rather that market sentiment regarding the September policy outcome has become uncertain again. For BTC, as long as interest rate pressure declines temporarily, price elasticity tends to be amplified.

Relying solely on interest rate expectations, it’s difficult for Bitcoin to sustainably hold at high levels. What truly convinces the market to reconsider levels above $80,000 is the return of capital into spot ETFs.

Public data shows that U.S. spot Bitcoin ETFs recorded approximately $277 million in temporary net inflows on Thursday. While this figure is not extraordinary, it provides support for market sentiment, as ETF capital flows reflect资金流向 from more traditional financial channels rather than short-term sentiment within exchanges.

Over the past few months, ETF fund flows have been an essential indicator to watch whenever Bitcoin experiences significant price swings. When prices rise, if ETFs see inflows simultaneously, it suggests demand from the spot market; if the rally is driven solely by the derivatives market, prices are likely to surge and then quickly retreat. The issue now is that a single day of inflows only indicates a rebound in sentiment—confirming a true trend requires sustained inflows over consecutive days.

In other words, an ETF is not a silver bullet, but it is an important indicator of whether there is genuine demand above $80,000.

Bitcoin's rapid rise this time is also related to short covering.

As U.S. Treasury yields rise and expectations for rate hikes intensify, many investors initially bet that BTC would continue to face downward pressure. Should the Fed’s rate hike expectations suddenly ease and the price rebounds above $80,000, some short positions will be forced to cover. Short covering itself acts as buying pressure—the higher the price rises, the greater the pressure to cover, making short-term price movements more volatile.

Thus, in this rally, there were both active and passive buying pressure. Active buying came from ETFs, spot markets, and improved risk appetite, while passive buying stemmed from short covering. The combination of these two forces propelled Bitcoin back to $81,000 in a short period.

But this also means that future price movements shouldn't be judged solely by the magnitude of the rally. Short-covering-driven rallies typically occur rapidly, and their sustainability depends on whether capital continues to flow in as the price pulls back. If trading volume is substantial above $80,000, it suggests the market is willing to accept a new price range; if the price quickly falls back toward $78,000, this rally is more likely a short-term correction following a shift in interest rate expectations.

During this rally, Ethereum has also returned to around $2,500, with BNB, DOGE, XRP, HYPE, Zcash, and others experiencing varying degrees of gains. At first glance, it appears the broader crypto market is rebounding, but structurally, the main focus remains on BTC and ETH.

BTC reflects macro capital's risk appetite toward crypto assets, while ETH better reflects on-chain ecosystem activity, stablecoins, DeFi, and application-layer engagement. Bitcoin's rebound to $80,000 is primarily driven by interest rate expectations and ETF inflows; Ethereum's follow-up rally indicates that risk appetite is beginning to spill over from BTC to other mainstream assets.

But this cannot be simply interpreted as a full-scale altcoin rally. A true altcoin cycle typically requires growth in stablecoin supply, increased on-chain activity, sustained expansion in market trading volume, and continued macroeconomic liquidity support. What we’re seeing now is more like a localized spread following a recovery in risk appetite, rather than all assets simultaneously entering strong trends.

This is also an area that requires careful distinction going forward. While a rise in BTC can boost market sentiment, the quality of price increases varies across different assets. Assets that rise quickly aren’t necessarily supported by stronger demand, and those that rise slowly aren’t necessarily ignored by capital.

When Bitcoin rises, crypto-related stocks often react more strongly. Coinbase reflects trading activity and expectations for compliant trading platforms, Robinhood represents retail trading enthusiasm, and Strategy captures the leverage associated with publicly traded companies holding BTC. After Bitcoin surged back above $80,000, these stocks moved in tandem, indicating that U.S. equity markets are also participating in this crypto asset rebound.

But crypto stocks and BTC are not the same thing. In addition to being influenced by Bitcoin’s price, they are also affected by company performance, trading volume, regulatory environment, valuation levels, and overall risk appetite in the U.S. stock market. When Bitcoin rises, they may rise even faster; when Bitcoin declines, their volatility may also be greater.

That’s why observing this market cycle requires more than just looking at BTC’s price alone. You need to examine multiple factors together—U.S. Treasury yields, the U.S. Dollar Index, spot ETFs, crypto-related stocks, and U.S. tech stocks—to determine whether capital is genuinely re-entering risk assets or simply engaging in short-term covering.

Bitcoin surged to $81,000; what matters most isn't the number itself, but whether $80,000 can transition from a resistance level to a support level.

If BTC can maintain consolidation above $80,000, while ETF inflows continue and U.S. Treasury yields do not rise significantly, the market will be more inclined to believe this rally is more than just an emotional recovery. Conversely, if the price quickly falls back below $78,000, it would indicate that selling pressure above $80,000 remains strong and capital has not yet formed sufficiently stable buying support.

From the perspective of trading structure, there will certainly be divergence around $80,000. Previously trapped capital may choose to reduce positions, short-term traders may take profits, and trend-following capital will observe the strength of buying support after a pullback. A truly healthy rally is not afraid of pullbacks—it fears pullbacks without volume or buying interest.

Therefore, what’s more important than whether prices continue to rise is whether the market is willing to absorb the pullback.

Before the Fed's September meeting, the market will continue to monitor employment, CPI, PCE, and Treasury yields. Waller's remarks have lowered the probability of a rate hike but have not ruled out the possibility outright. If subsequent inflation data continues to cool, risk assets will find it easier to maintain momentum; if inflation reaccelerates, Treasury yields may rise again, testing the support for Bitcoin above $80,000.

This is the most delicate aspect of the current market. BTC has indeed reclaimed $80,000, but it hasn’t broken free from the broader macro environment. ETF inflows have provided底气, Fed expectations have added elasticity, and short covering has accelerated the rally. Whether this rebound can extend further depends on whether these factors can continue to align.

Bitcoin has surged back above $81,000, indicating that market risk appetite is recovering. However, $80,000 is not the end—it’s more like a new stress test. If Bitcoin can hold this level, it will lay the foundation for further market expansion; if it fails to hold, this rally may simply be a rapid rebound following the correction after an interest rate hike bet.