Bitcoin Rebounds to $77,918 as Crypto Liquidations Reach $341 Million
Bitcoin rebounded 1.42% to $77,918, while Ethereum rose 1.13% to $2,513. Solana gained 2.69% to $102.43, and XRP led major tokens with a 5.24% increase to $1.4187. The broader crypto market recovered despite pressure from expectations that the US Federal Reserve will raise rates by 25 basis points this week and the 10-year Treasury yield moving above 5%.
Crypto derivatives liquidations reached $341 million over 24 hours. Short positions accounted for $232 million, or about 68% of total liquidations, affecting 77,568 traders. The largest single liquidation was a $9.19 million ETH/USDT position on Binance.
Market sentiment improved sharply. The Crypto Fear and Greed Index rose 12 points to 69, signalling greed after recently holding in a neutral-to-fear range. Bitcoin remains above its 50-day and 200-day moving averages but is below the 20-day average near $78,474. Key resistance levels are around $78,474, $80,974 and $82,300. Support is near $75,973 and $71,449.
Ethereum trades above its key moving averages and the Bollinger middle band at $2,474. Resistance is near $2,549 and $2,666, while support stands around $2,474 and $2,400. Traders are watching the Fed decision and whether Bitcoin can reclaim the $78,500 area. On-chain data indicates buying support near $76,000, but policy guidance could determine whether the rebound continues.
Bullish
The immediate market impact is bullish but fragile. Bitcoin, Ethereum, Solana and XRP all moved higher, while short liquidations significantly exceeded long liquidations. This suggests that the rebound triggered a short squeeze and that traders were forced to cover bearish positions. The Fear and Greed Index also climbed to 69, indicating renewed risk appetite.
Technical conditions are supportive. Bitcoin remains above its 50-day and 200-day moving averages, while Ethereum is above its 20-day, 50-day and 200-day averages. Buying support near $76,000 could limit downside in the short term. A sustained move above Bitcoin’s 20-day average near $78,474, followed by a break above $80,974, would strengthen the bullish case. Failure to reclaim that level could leave the market range-bound or expose it to a retest of $75,973.
However, the outlook is vulnerable to macroeconomic risk. A Federal Reserve rate hike and hawkish guidance could lift Treasury yields, strengthen the US dollar and pressure speculative assets. Similar Fed-driven episodes have often produced sharp crypto volatility, even when prices initially rise on short covering. The elevated liquidation total also shows that leverage remains high.
In the short term, traders may favour momentum strategies while monitoring the Fed decision, funding rates and liquidation data. In the longer term, continued upside would require easing rate expectations and sustained inflows rather than a temporary short squeeze. Therefore, the news is classified as bullish, with a high risk of reversal around key resistance levels.