Bitcoin Breakout Cools as Fed Rate-Hike Bets Climb
Bitcoin pulled back to about $84,490 on Thursday after touching an eight-month high near $87,397 on Monday, as traders increased the probability of another Federal Reserve rate hike in October. The broader crypto market cooled, with most top tokens down while BNB and Solana posted 24-hour gains.
Why It Matters
Rising odds of tighter Fed policy typically strengthen the dollar and raise yields on cash and government bonds, which can reduce demand for non-yielding, volatile assets like Bitcoin and constrain leveraged crypto positions. Market moves ahead of the Fed's October decision will likely influence price momentum and liquidity in crypto markets.
Key Facts
- Bitcoin price (Thursday): $84,490 (approx.)
- Monday high: $87,397
- CME FedWatch October hike odds: roughly 75%
- CME FedWatch December odds: roughly 59%
- Crypto liquidations (24 hrs): $348.33 million
Bitcoin retreated from an eight-month peak this week as traders priced in a higher chance the Federal Reserve will raise interest rates again as soon as October. The cryptocurrency traded near $84,490 on Thursday after reaching about $87,397 on Monday, reversing some of a rapid rally that pushed it from the mid-$70,000s to that high in under a week. Market participants raised bets on further tightening after data and Fed commentary suggested inflation remains elevated. CME Group’s FedWatch tool showed roughly a 75% probability of a 25-basis-point move in October and about a 59% chance of another hike in December. The Fed’s preferred inflation gauge, core PCE, was cited at 3.4%, well above the 2% target, and Fed Governor Michael Barr indicated further policy adjustments may be needed. Most of the top cryptocurrencies cooled alongside Bitcoin. Ethereum was up about 1.4% near $2,689 and XRP was essentially flat at $1.52, while Zcash and Hyperliquid gave back recent gains. BNB and Solana were exceptions, rising 2.75% to $781.33 and 2.31% to $116.08 respectively, supported by specific flows and custody developments — including Binance’s $100 million purchase of Circle shares and portfolio rebalancing in Grayscale’s Smart Contract Fund. Derivatives metrics showed $348.33 million in liquidations over 24 hours, with $270.89 million hitting long positions and $77.43 million on the short side after last week’s short squeeze. Spot Bitcoin ETFs also drew heavy inflows earlier in the week, taking in $998.9 million on Monday — their largest single-day inflow in 11 months — and net 2026 flows into the funds turned positive at roughly $320 million. The total crypto market capitalization stood around $2.93 trillion, down about 2.5% from the roughly $3 trillion level seen during last week’s rally. The market now eyes the Federal Open Market Committee meeting on October 27-28 for confirmation of whether the recent cooldown will persist or if another leg higher could resume. Sentiment indicators still showed elevated risk appetite: the Crypto Fear and Greed Index read 73, in 'greed' territory, while the Altcoin Season Index was at 51.