Global cryptocurrency markets extended their winning streak into the new week, as Bitcoin, Ether, and other leading digital assets surged on renewed macroeconomic optimism and aggressive short liquidations. The rally follows reports of a potential trade framework between the United States and China and growing expectations for a U.S. Federal Reserve interest rate cut this week.
Bitcoin hits two-week high as buyers overpower short sellers
According to TradingView, Bitcoin (BTC) reached a peak of $116,400 before now trading around $115,300. Data from CoinGlass showed that the upward move triggered a cascade of short liquidations, including nearly $160 million in shorts wiped out in just 30 minutes and a total of $347.5 million over the past day.
JUST IN: $160,000,000 worth of crypto shorts liquidated in the past 30 minutes.
— Watcher.Guru (@WatcherGuru) October 26, 2025
“This is a textbook short squeeze,” said Vincent Liu, Chief Investment Officer at Kronos Research. “Bearish traders were forced to cover as prices climbed, accelerating momentum to the upside.”
Similarly, Ether (ETH) surged about 6.5% to trade above $4,200, while Solana (SOL), BNB, and XRP each gained between 2% and 6%.
Rachael Lucas, an analyst at BTC Markets, described the move as part of a larger recovery trend.
“This isn’t an isolated jump,” she said. “Macroeconomic optimism, tightening on-chain supply, and bullish technical indicators are driving sustained upward pressure.”
Trade deal hopes boost risk appetite
Market sentiment strengthened over the weekend after the New York Times reported that the U.S. and China had reached a preliminary trade framework ahead of President Donald Trump’s meeting with Chinese President Xi Jinping scheduled in South Korea later this week.
“Investors are reacting positively to signs of diplomatic progress,” Lucas added. “A thaw in U.S.–China relations could ease supply chain constraints and improve the global trade environment, which tends to benefit risk assets like cryptocurrencies.”
Fed rate cut expectations reinforce bullish sentiment
Attention now turns to the upcoming Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday, where traders expect another interest rate cut. The CME Group’s FedWatch Tool shows a 96.7% probability of a 25-basis-point cut, lowering the target range to 3.75%–4.00%.
Joel Kruger, strategist at LMAX Group, said that expectations for a “more accommodative policy stance” have fueled risk-taking across global markets.
“Softer inflation data, combined with easing yields, supports a favorable environment for non-yielding assets such as cryptocurrencies,” he said.
Technicals point to possible year-end ‘Santa Rally’
Bitcoin has now logged five consecutive daily gains, mirroring a seasonal trend often dubbed the “Santa Rally”. Analysts suggest that year-end liquidity flows and portfolio rebalancing could keep momentum strong into December.
“We anticipate a continuation of bullish momentum into year-end,” Nick Ruck, Research Director at LVRG, said “Historically, post-halving periods and the final quarter of the year tend to deliver strong returns.”
Lucas estimates that Bitcoin could advance 15%–25% from current levels, targeting a potential range between $130,000 and $150,000 by late 2025 if macro conditions remain favorable. Still, she cautioned that volatility may persist as markets digest shifting rate expectations and trade developments.
Broader crypto outlook remains constructive
The sharp rebound has restored investor confidence following weeks of choppy price action earlier this month. With easing trade tensions, dovish central bank signals, and continued institutional inflows, several analysts expect the broader crypto market to remain supported.
“While short-term swings are inevitable, the underlying structure of this rally appears stronger than previous speculative surges,” Liu said. “As long as macro fundamentals remain aligned, digital assets could enter a new phase of sustained growth heading into 2026.”
Anastasiia G
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