Bitcoin cools as October Fed hike odds reach roughly 75%

Bitcoin traded near $84,490 Thursday after falling from Monday's $87,397 high. Traders priced higher odds of another Federal Reserve rate hike. CME's FedWatch tool put October hike odds at roughly 75%. December hike odds were near 59%. The odds rose after Bitcoin rallied from the mid-$70,000s to an eight-month high in under a week. A rate hike can strengthen the dollar. A rate hike can also increase returns on cash and government bonds. Those changes can make non-yielding assets such as Bitcoin less attractive. Higher rates can also reduce market liquidity. Higher rates can raise the cost of leveraged trading. Crypto derivatives recorded $348.33 million in liquidations over 24 hours. Long positions accounted for $270.89 million of the liquidations. Short positions accounted for $77.43 million. Wednesday's rate increase was the Federal Reserve's first hike since July 2023. The July 2023 increase lifted the benchmark rate to a range of 5.25% to 5.5%. The September 16 increase passed unanimously in a 12-0 vote. The increase brought the target range to 3.75% to 4%. Fed Chair Kevin Warsh paired the increase with a dot plot that projected a median rate of 4.1% through the end of 2027. Traders interpreted that projection as leaving room for one more move. Fed Governor Michael Barr said further policy adjustments are likely needed to return inflation to its target. An S&P Global report showed inflation at its highest level in nearly four years. Core PCE was at 3.4%. The Federal Reserve's target is 2%. Myriad Markets put the chance of another hike before year-end at 68.5%. Myriad Markets is a predictions platform built by Decrypt's parent company, Dastan. CME's FedWatch tool put the chance of a 25-basis-point October move at roughly 75%. Most of the top 10 cryptocurrencies were also cooling. Ethereum rose 1.42% over 24 hours to near $2,689. XRP was essentially flat at $1.52. Zcash fell 2.5% to $1,527.57 after rising more than 2,700% in the last year. Hyperliquid fell 0.37% to $93.04. BNB rose 2.75% to $781.33. BNB moved above $790 this week. BNB recorded an 11% weekly gain. Binance purchased $100 million of Circle shares. The purchase tied Binance to five years of USDC growth. Solana rose 2.31% to $116.08. Solana reached a nine-month high above $117 last week. Grayscale's Smart Contract Fund assigned BNB a 30.6% weighting in its latest rebalance. Ethereum had a 29.47% weighting. Solana had a 29.15% weighting. BNB became the fund's largest holding. ZetaChain token holders voted 99.4% in favor of moving the project's token and AI app to the Solana network. Spot Bitcoin ETFs received $998.9 million on Monday. That was their biggest single-day inflow in 11 months. Net 2026 flows into the funds turned positive for the first time this year at roughly $320 million. Total crypto market capitalization was $2.93 trillion. That figure was about 2.5% below the $3 trillion level reached during last week's rally. The Crypto Fear and Greed Index was 73 in the greed range. The Altcoin Season Index was 51. The next Federal Reserve rate decision is scheduled for October 28.