The leading cryptocurrency slipped to roughly $84,500, retreating from the $87,400 peak reached earlier in the week. The pullback coincided with a surge in market estimates that the Federal Reserve will raise rates again in October, with CME’s FedWatch tool now indicating about a 75% chance of a 25-basis-point move. A similar tool from Myriad Markets shows the probability of another hike before year-end at roughly 68-70%.
Higher rates typically boost the dollar and make yield-bearing assets more attractive, diminishing the appeal of non-yielding, volatile assets such as Bitcoin. The prospect of tighter monetary policy also squeezes market liquidity, raising the cost of leveraged positions—a factor that historically weighs on crypto prices during tightening cycles.
Altcoin landscape shows mixed signals
Most of the top-ten digital assets followed Bitcoin’s downward drift. Ethereum logged a modest 1.4% rise to about $2,690, while XRP remained flat near $1.52. Zcash slipped 2.5% to $1,527, despite a year-long rally that lifted it more than 2,700%.
Two exceptions were Binance Coin (BNB) and Solana. BNB advanced 2.8% to $781, extending an 11% weekly gain after Binance’s $100 million acquisition of Circle shares, which ties the token to five years of USDC growth. Solana rose 2.3% to $116, building on a recent nine-month high above $117. Institutional demand helped both tokens: Grayscale’s Smart Contract Fund now weights BNB at 30.6%, edging out Ethereum (29.47%) and Solana (29.15%). Solana also attracted new activity after ZetaChain token holders voted overwhelmingly to migrate to its network.
Derivatives and market liquidity under pressure
Crypto derivatives recorded $348 million in liquidations over the past 24 hours. Long positions absorbed $270 million of that total, while short positions accounted for $77 million. The imbalance reflects the aftermath of last week’s short-squeeze, which left many leveraged bulls exposed to the current reversal.
Institutional inflows keep market bullish
Spot Bitcoin exchange-traded funds attracted nearly $1 billion in net inflows on Monday, the largest single-day addition in eleven months. Year-to-date, the funds have turned positive for the first time this year, with about $320 million net flowing in. Overall market capitalization stands at $2.93 trillion, a modest 2.5% dip from the $3 trillion peak recorded during the recent rally.
The Crypto Fear & Greed Index remains in “greed” territory at 73, while the Altcoin Season Index sits near the midpoint at 51, suggesting a market that still leans toward Bitcoin-driven dynamics.
What lies ahead
The next decisive moment will be the Fed’s policy meeting on October 28, where the central bank will announce whether the current pause is a brief intermission or the start of a more prolonged tightening cycle. Traders will closely watch core PCE inflation, currently at 3.4%—well above the Fed’s 2% target—as a key gauge of future monetary actions.
Why it matters
Bitcoin’s price reaction underscores how sensitive crypto markets are to macroeconomic policy signals, especially interest-rate expectations. While institutional money continues to flow into Bitcoin-linked products, heightened rate-hike odds could dampen risk appetite and increase pressure on leveraged positions. The divergent performance of BNB and Solana highlights that token-specific fundamentals and institutional allocations can create pockets of resilience even as the broader market cools.
