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The crypto market showed positive movement at the beginning of the week. Bitcoin (BTC) surged following a wave of large-scale short position liquidations, while optimism over a potential interest rate cut by the U.S. Federal Reserve (The Fed) further boosted market sentiment.
According to The Block, more than US$350 million worth of Bitcoin short positions were liquidated in the past 24 hours. This phenomenon, known as a short squeeze, occurs when traders betting on price declines are forced to close their positions as the price rises rapidly.
The Fed’s Policy Sentiment and Market Impact
The positive sentiment was not limited to the crypto market but also extended to U.S. equities. Major indices such as the S&P 500 and Nasdaq 100 strengthened following growing expectations that the Fed may cut interest rates in its upcoming meeting.
This environment has boosted investor appetite for risk assets, including cryptocurrencies. Bitcoin and Ethereum were among the top gainers, with BTC briefly surpassing the psychological level of US$115,000.
Bitcoin Price Outlook
Overall, Bitcoin’s recent price increase is driven by a combination of technical and macroeconomic factors. If selling pressure remains under control and market liquidity continues to improve, short-term upside potential remains open. However, volatility is still high, meaning price movements can change rapidly.
For market participants, this situation highlights how the interaction between global economic policy and derivative trading activity can significantly influence cryptocurrency price movements.
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