The probability of further rate hikes rises to 60.2%! Fed signals increase volatility risk in the crypto market
According to the latest estimates from the CME Fed Watch, market expectations for the Fed’s September interest rate decision have shifted notably.
Data show that the probability of the Fed keeping rates unchanged in September is only 39.8%, while the probability of a 25-basis-point hike reaches 60.2%. Looking ahead to October, policy expectations are also hawkish: the probability of keeping rates unchanged is 28.3%, the probability of a 25-basis-point hike is 54.3%, and even a 50-basis-point hike stands at 17.3%.
Changes in the Fed’s rate outlook have long been a key indicator that crypto markets cannot ignore. Cryptocurrencies are a typical risk asset, and whether dollar liquidity is loose or tight directly determines the overall direction of the crypto market. Once a rate hike begins, it signals tighter market liquidity; the appeal of the U.S. dollar and U.S. Treasuries will further increase, and funds often flow out of high-risk crypto markets.
Reviewing several past rate-hike cycles makes it clear: whenever rate-hike expectations heat up, Bitcoin is typically the first to come under pressure, which then drags the entire crypto market into a choppy pullback, with altcoins often experiencing even larger swings.
However, it’s important to distinguish the current situation. At present, 60.2% is only the probability expectation priced into the market—not a settled, already-implemented fact. Markets often absorb such expectations in advance. Even if a rate hike is ultimately carried out, there could still be a short-term “bad news priced in” rebound. Therefore, it’s not safe to simply assume that rate hikes will push prices down in a continuous straight line.
Right now, the crypto market is in a phase of tug-of-war: on one side, rising rate-hike expectations steadily suppress the trading environment; on the other, the market is also weighing the possibility of future policy shifts. Ordinary participants should not blindly chase rallies, as the upcoming market volatility is likely to intensify significantly.
There are two key points that should be continuously monitored going forward: first, core U.S. economic data such as inflation and employment—changes in the data can rewrite rate-hike probabilities at any time; second, the wording and stance conveyed in the Fed meeting—this will shape the broader crypto market landscape over the coming period.
In summary, the rising probability of rate hikes has already sounded an alarm for the market. Going forward, the crypto market will most likely remain in a high-volatility state, and all scenario analysis must closely track Fed policy developments. Everything ultimately comes down to the official final decision.
#美财政部拟回购最多60亿美元国债 $NVDAB
According to the latest estimates from the CME Fed Watch, market expectations for the Fed’s September interest rate decision have shifted notably.
Data show that the probability of the Fed keeping rates unchanged in September is only 39.8%, while the probability of a 25-basis-point hike reaches 60.2%. Looking ahead to October, policy expectations are also hawkish: the probability of keeping rates unchanged is 28.3%, the probability of a 25-basis-point hike is 54.3%, and even a 50-basis-point hike stands at 17.3%.
Changes in the Fed’s rate outlook have long been a key indicator that crypto markets cannot ignore. Cryptocurrencies are a typical risk asset, and whether dollar liquidity is loose or tight directly determines the overall direction of the crypto market. Once a rate hike begins, it signals tighter market liquidity; the appeal of the U.S. dollar and U.S. Treasuries will further increase, and funds often flow out of high-risk crypto markets.
Reviewing several past rate-hike cycles makes it clear: whenever rate-hike expectations heat up, Bitcoin is typically the first to come under pressure, which then drags the entire crypto market into a choppy pullback, with altcoins often experiencing even larger swings.
However, it’s important to distinguish the current situation. At present, 60.2% is only the probability expectation priced into the market—not a settled, already-implemented fact. Markets often absorb such expectations in advance. Even if a rate hike is ultimately carried out, there could still be a short-term “bad news priced in” rebound. Therefore, it’s not safe to simply assume that rate hikes will push prices down in a continuous straight line.
Right now, the crypto market is in a phase of tug-of-war: on one side, rising rate-hike expectations steadily suppress the trading environment; on the other, the market is also weighing the possibility of future policy shifts. Ordinary participants should not blindly chase rallies, as the upcoming market volatility is likely to intensify significantly.
There are two key points that should be continuously monitored going forward: first, core U.S. economic data such as inflation and employment—changes in the data can rewrite rate-hike probabilities at any time; second, the wording and stance conveyed in the Fed meeting—this will shape the broader crypto market landscape over the coming period.
In summary, the rising probability of rate hikes has already sounded an alarm for the market. Going forward, the crypto market will most likely remain in a high-volatility state, and all scenario analysis must closely track Fed policy developments. Everything ultimately comes down to the official final decision.
#美财政部拟回购最多60亿美元国债 $NVDAB
