Bitcoin Slips to $84K After $87K Rejection as Fed Rate-Hike Bets Surge
Bitcoin’s latest rally hit a wall this week. After climbing roughly 13% off a low near $75,000 and briefly touching above $87,000, the largest cryptocurrency has pulled back to trade around $84,000-$84,400, according to data from CoinDesk and other market trackers. The retreat triggered a wave of leveraged long liquidations as traders who had piled into upside bets were forced to sell.
Ethereum moved in sympathy, slipping toward the $2,675 range. The pullback comes as macro conditions shift in a direction that has historically made risk assets, including crypto, more volatile: rising expectations that the Federal Reserve will keep tightening rather than cutting.
Rate-Hike Bets Are Back in Focus
CME Group’s FedWatch tool, which tracks futures-implied probabilities for Fed policy moves, has shown the odds of a 25-basis-point rate hike at the Fed’s October meeting climbing sharply, with recent readings putting the probability near 70%. That marks a notable shift in sentiment from earlier in the year, when markets were largely positioned for the Fed to hold or cut.
Adding to the pressure, the U.S. Dollar Index climbed to around 101.2 this week, its highest level since late July and up roughly 2.5% from its September lows. A stronger dollar typically makes dollar-denominated assets like Bitcoin more expensive for international buyers and tends to correlate with tighter global liquidity conditions — a headwind for risk assets broadly.
Fueling the hawkish repricing was a stronger-than-expected preliminary U.S. September PMI reading of 58.4, the fastest pace of business activity expansion since 2021, alongside an Input Prices Index that hit its highest level since October 2022. Strong growth paired with rising input costs is the kind of data mix that tends to keep central bankers cautious about easing policy.
ETF Flows Tell a More Complicated Story
Despite the macro headwinds, spot Bitcoin ETFs have continued to see substantial demand in recent weeks, with net inflows reaching into the billions of dollars across multiple trading sessions this month. That steady institutional buying has provided a partial offset to the macro-driven selling pressure, and it’s one reason traders are watching ETF flow data as closely as the Fed calendar itself.
The tension between strong institutional demand on one side and a hawkish rate outlook on the other is likely to keep Bitcoin volatile heading into October. A Fed decision that surprises markets — in either direction — could move prices sharply, while a hike that matches the roughly 70% odds already priced in may have a more muted effect, since much of that expectation is already reflected in current prices.
What to Watch
- The October FOMC meeting — a hike that comes in above or below the roughly 70% priced-in probability could trigger outsized moves.
- Daily spot Bitcoin ETF flow data — continued strong inflows would suggest institutional demand is absorbing macro-driven selling.
- The U.S. Dollar Index — further strength could keep pressure on Bitcoin and other risk assets.
This article is for informational purposes only and does not constitute financial advice.
