Key facts
- Bitcoin traded near $84,490 Thursday, down from Monday's high of $87,397.
- CME FedWatch data indicates roughly 75% odds of an October Fed rate hike and 59% odds for December.
- BNB and Solana were the only top 10 cryptocurrencies posting 24-hour gains, up 2.75% and 2.31% respectively.
- Crypto derivatives saw $348.33 million in liquidations over 24 hours, with $270.89 million on the long side.
- Total crypto market capitalization dipped to $2.93 trillion from $3 trillion.
Bitcoin's recent breakout rally has cooled as traders price in a higher probability of further interest rate hikes by the Federal Reserve. The digital asset traded near $84,490 on Thursday, a decline from its Monday high of $87,397. This pullback follows a rapid ascent from the mid-$70,000s to an eight-month peak in less than a week.
Concerns over persistent inflation have driven up expectations for another rate hike, with CME's FedWatch tool indicating approximately 75% odds for an October increase and nearly 59% for December. Historically, higher interest rates make non-yielding, volatile assets like Bitcoin less attractive by strengthening the dollar and increasing returns on cash and government bonds. Elevated rates also tend to reduce market liquidity and increase the cost of leveraged trading, which can negatively impact crypto prices.
Fed Governor Michael Barr indicated on Wednesday that further policy adjustments may be necessary to combat inflation, which remains above the Fed's 2% target. An S&P Global report on the same day showed inflation at its highest level in nearly four years, with core PCE at 3.4%.
Most of the top 10 cryptocurrencies mirrored Bitcoin's cooling trend. Ethereum was up 1.42% near $2,689, XRP was largely flat at $1.52, and Zcash dropped 2.5% to $1,527.57, despite a significant year-long run. Hyperliquid also slipped 0.37% to $93.04.
Exceptions included BNB, which rose 2.75% to $781.33, extending a weekly gain fueled by Binance's investment in Circle shares. Solana climbed 2.31% to $116.08, building on a nine-month high. Both BNB and Solana have seen recent institutional interest, with Grayscale's Smart Contract Fund giving BNB the largest weighting in its latest rebalance. Solana also benefited from a vote by ZetaChain token holders to migrate their project onto the Solana network.
Despite the short-term pullback, the broader crypto market backdrop remains somewhat bullish. Spot Bitcoin ETFs saw their largest single-day inflow in 11 months on Monday, with $998.9 million invested, and net flows for 2026 turned positive for the first time this year. Derivatives data showed $348.33 million in liquidations over 24 hours, with long positions accounting for the majority. The total crypto market capitalization stood at $2.93 trillion, down from a recent $3 trillion peak. The Crypto Fear and Greed Index remained in "greed" territory at 73.