Bitcoin rises above $116,000 on Fed’s soft bet: What’s next?

Cryptocurrency markets started this week with a sharp rally driven by a rare coincidence of macroeconomic upturns.

According to crypto slate According to the data, Bitcoin rose to an intraday high of over $116,000 before stabilizing around $115,587 at the time of writing. Notably, this is the highest price level in recent weeks, indicating that previous records are within sight.

Ethereum followed this move and rallied towards $4,200, while Solana rose above the $200 level. Other top digital assets such as BNB, Cardano, Chainlink, and HyperLiquid also recorded significant increases during the reporting period.

The synchronized uptrend marked the emergence of new momentum after several sessions of depletion and consolidation across major altcoins.

Reasons why Bitcoin price has increased

On-chain indicators suggest that this rally was not just speculative.

For the first time since the October 10 crash, cumulative volume delta (CVD) for spot and futures has flattened out, according to data from Glassnode. This change signals that aggressive selling pressure has finally eased after nearly two weeks of capitulation.

At the same time, funding rates remain below the neutral benchmark of 0.01%, indicating that traders are not taking too much advantage of the upside. Indeed, funding levels have briefly fallen into negative territory several times over the past two weeks, reflecting a cautious market still recovering from recent restructuring.

Short-term options skew also reveals that sentiment reached very negative levels just before an uptrend began, and such movements often precede sharp reversals.

Macro signatures are beneficial for Bitcoin

BRN Research Director Timothy Michiel said: crypto slate He said macro headlines have “done the heavy lifting” for BTC’s current rally.

He said reports of progress toward a U.S.-China trade framework and signs of a flexible stance from the Fed helped reduce risk premiums and boost capital turnover into cryptocurrencies.

The resulting bull market was “highly headline-dependent,” he said, with good news causing an unusual squeeze and any policy pullback could quickly unwind gains.

Meanwhile, Misir also pointed out that this rebound has caused widespread liquidations across the derivatives market.

Approximately $365 million in short positions were wiped out within hours, affecting more than 100,000 traders, according to Coinglass data. Bitcoin short sales alone accounted for approximately $174 million of these losses.

With this in mind, Misir noted that the combination of macro easing and forced short covering created a “short, sharp risk-on leg.”

In particular, institutional investors, particularly ETFs, corporate bonds, and mid-cap whales, absorbed sell-side supply and helped sustain the upward momentum. Still, he cautioned that the market structure remains fragile, with options and futures positioning leaving the front end vulnerable to headline volatility.

Michelle concluded as follows:

“Treat a break above $116,000 as a potential liquidity magnet (and treat a break below $108,500 as a tactical sell signal).”