Bitcoin Breathes, Fed Rate Hike Probability Drops to 13%
After 24 hours of storm on the financial markets, the wind turns abruptly for investors. While an unexpected overheating of American inflation threatened the worst, tension eases on prediction markets. Between panic on the Fed rates in October and relief on derivatives, Bitcoin begins a decisive arbitrage phase.
In Brief
- The risks of Fed rate hikes in October collapse to 13% on Polymarket.
- Massive liquidations sharply decrease, allowing Bitcoin’s price to stabilize.
- The absence of aggressive announcement from Kevin Warsh reassures institutional investors and the markets.
- Investor enthusiasm remains strong, illustrated by spectacular trader movements in Taiwan.
Fed Rate Hike in October, the Spectacular Reversal on Polymarket
The start of the week was marked by a drop in bitcoin and strong macroeconomic nervousness. Following recent data on American inflation (CPI at 3.7% and surge of PPI), speculators feared that the Federal Reserve (Fed) might change its monetary path. The Polymarket platform immediately reacted by raising the probability of an interest rate hike in October to a worrying peak of 48.5%.
However, recent neutral signals issued by Kevin Warsh of the Fed quickly reversed the trend. The probability of a monetary tightening in October collapsed to return to historically low levels, sweeping away the specter of an imminent rate hike.
| Macro / Market Indicator | Panic Peak (Post-CPI/PPI) | Current Situation (Post-Fed) | Market Impact |
| Probability of Rate Hike (Fed) | 48.5% on Polymarket | 13.5% (CME / Polymarket) | Sharp decline in fears |
| Probability of Status Quo (Pause) | ~51.5% | 85% to 86% |
Central scenario favored |
| Crypto Liquidations over 24h | Nearly 1 Billion $ vert{} 311 Million $ | Leverage purge & Stabilization | |
| Rate Cut Outlook (Q4 Horizon) | Postponed by the market | Postponed to end of 2026/2027 | Short-term volatility |
Easing of Crypto Derivatives and FOMO on Global Markets
The purge of open positions stabilized, allowing Bitcoin’s price to firmly defend its major support zones. This cleaning of excessive leverage offers a healthier ground for future operations.
Meanwhile, the global bullish momentum continues to attract investors. In Taiwan, Bloomberg analyst Eric Balchunas reports an unprecedented FOMO phenomenon, that of institutional fund managers quitting en masse to day trade personally and benefit from the boom in stock markets. But what about bitcoin?
What Will the Fed’s Decision Reserve for Bitcoin?
In the short term, confirmation of a monetary pause by the Fed by the end of October should provide a real breath of fresh air to the crypto market. If the US central bank avoids any rate hike, the reduction in volatility on bonds could encourage a gradual return of capital towards bitcoin and Ethereum, targeting retesting higher resistances.
In the longer term, the trajectory remains dependent on global liquidity. If inflation refuses to sustainably decrease and pushes back any prospect of rate cuts to next year, bitcoin could evolve within a broad consolidation channel. Nevertheless, the current accumulation by large holders during down phases suggests that institutional investors already anticipate a strong year-end rally.
The fear of a rate hike recedes and gives bitcoin fresh air. After a salutary purge on derivatives, the market regains its stability. If the Fed confirms its status quo in October, the regained liquidity could propel crypto and BTC to new highs.
Maximize your Cointribune experience with our "Read to Earn" program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
The Kiwi defies hot US inflation as Fed pause bets weaken the USD
Apple says iPhone Duo demand is "unprecedented," pre-orders sold out within minutes, deliveries postponed until January next year
Within minutes of opening pre-orders for Apple's first foldable screen phone, iPhone Duo, the delivery period was extended to the end of January next year, affecting all colors and storage configurations. Analysts from Bloomberg Intelligence have raised their sales expectations, believing that sales may surpass the target of 14 million units and $28 billion. On Friday, Apple's stock price rose slightly by 0.43%.
Credit panic hits AI trading: CoreWeave bond yields remain high, Nasdaq posts biggest weekly drop since late June
Concerns over the debt risk of AI infrastructure companies continue to rise. Yields on some CoreWeave bonds briefly exceeded 15% on Thursday and remained elevated on Friday. CoreWeave's stock price plunged another 12% on Friday, and the Nasdaq Composite Index fell about 4.5% for the week. Analysts point out that as capital costs rise to unbearable levels, companies will have no choice but to reduce their capital expenditures.
Philadelphia Semiconductor Index Experiences Longest Losing Streak Since 2008; Jensen Huang Responds Calmly: Short-term Fluctuations Won't Change AI's Long-term Growth Prospects
Despite recent sell-offs in AI-related stocks, Nvidia CEO Jensen Huang remains confident in the long-term prospects of the AI industry.
Crypto prices
More
