The crypto market—including Bitcoin and altcoins like XRP, Ethereum, and BNB—is riding a bullish wave of momentum in the U.S. stock market, seemingly triggered by fresh comments from the Federal Reserve, and sending short sellers to goblintown.

Bitcoin punched back above $80,000 on Thursday, trading near $80,270 and up close to 3% over the past 24 hours. Ethereum is closing in on $2,500, up 2.2% today, while XRP is up a whopping 6% in the last 24 hours. The spike has accounted for at least $327 million in liquidated short positions in the last hour alone, and more than $415 million in the past 24 hours.

The catalyst appears to be comments from Fed Governor Christopher Waller, who, in prepared remarks at a Reuters NEXT Newsmaker interview, said he’d be “inclined to support” holding the Fed’s benchmark interest rate at its current level if upcoming inflation data keeps improving.

Traders took the hint. The odds of a rate hike at the Fed’s September 15-16 meeting fell to 50.4%, down from 63.2% a day earlier, according to the CME FedWatch tool, a market gauge that estimates the odds of Fed moves from futures prices. The 10-year Treasury yield, a benchmark for borrowing costs economy-wide that had touched its highest level since November 2023 a day earlier, dropped to around 4.73%.

It’s a sharp reversal from a week ago. Fed Chair Kevin Warsh’s hawkish Jackson Hole keynote had knocked Bitcoin down to $76,877 and pushed hike odds toward 56%. Thursday’s bounce puts Bitcoin back at a level it’s tested—and failed to hold—several times this year.

Stocks moved in the same direction. The Dow Jones Industrial Average climbed 453 points, or 0.9%, while the S&P 500 and Nasdaq each gained close to 1%. Nvidia added to the tech sector’s strength after confirming a roughly $13 billion deal to buy AI model hub Hugging Face, and Snowflake shares soared after a stronger-than-expected earnings report.

An interest rate hike would be the Fed’s first since July 2023, when it took the benchmark rate to a 22-year high of 5.25% to 5.50% to fight post-pandemic inflation.

Higher rates make cash and bonds pay more, pulling money out of riskier bets like stocks and crypto, and they tend to strengthen the dollar, which weighs on dollar-priced assets like Bitcoin. A hold keeps that pressure off, which is why traders read Waller’s comments as good news for risk assets rather than a reason to sell.

Short sellers are getting rekt

Crypto’s rally has a specific flavor: short sellers getting forced out, as opposed to just fresh buying. CoinGlass data show more than $500 million in liquidations across crypto in the past 24 hours—positions an exchange force-closes when a trader can no longer cover losses—and $416 million of that came from short bets that price would fall, versus just $92 million in longs. More than 119,000 traders were liquidated in the past day.

The liquidation cascade has been sudden, with the bulk of those short bets getting force closed in just the last hour: all in all, more than $329 million in shorts have been liquidated in the past hour, with $86 million coming from Bitcoin bets alone.

That can be considered a short squeeze: rising prices force short sellers to buy back their positions to limit losses, and that buying pushes prices up even further. It’s the same mechanic that drove a $570 million liquidation wave last month, when Bitcoin rebounded from around $57,000.

What’s next

The next test lands fast. The Bureau of Labor Statistics releases the August jobs report Friday morning, the last major economic release before the Fed’s September 15-16 meeting.

Waller himself expects little change: job creation has averaged 60,000 a month through July, and unemployment held at 4.1%.

A weak reading wouldn’t be unprecedented. July’s jobs miss knocked rate-hike odds down on its own the month before—proof a single report can move the number as much as a Fed speech can.