Hike Odds to 17%: A Tactical Breather for Crypto*
Expectations ahead of the October 28 Fed meeting have taken a decisive turn. Probabilities in the derivatives market for an interest-rate increase have plunged sharply to around *17%*, after hovering above *60-70% just weeks ago.*
This drastic moderation is driven by two key factors:
*1. Mixed macro data:* A cooling in the U.S. jobs report - only 29K jobs added in September vs 84K expected - and underlying inflation figures which, while still high at 3%, show signs of gradual stabilization (below 3.3% forecast).
*2. More cautious messaging:* Comments from Fed officials - NY Fed President Williams and Vice Chair Jefferson - suggesting that the current monetary stance needs more time to be assessed before applying another adjustment. No urgency for back-to-back hikes.
For the digital asset ecosystem, this easing of restrictive pressure acts as a direct catalyst for liquidity and risk appetite.
As the odds of a rate hike unravel to 17%, the process is partially reversed: valuation multiple compression comes to a halt, and investors reduce their demand for extreme risk premium to enter assets like Bitcoin (BTC) or Ethereum (ETH).
*Conclusion:* The drop to 17% in the odds of a rate hike in October removes a major headwind for cryptocurrencies. However, the market will continue to be shaped by the trajectory of long-term bond yields and upcoming inflation data. For now, the crypto sector gains valuable room to consolidate support levels.
$BTC $ETH
Expectations ahead of the October 28 Fed meeting have taken a decisive turn. Probabilities in the derivatives market for an interest-rate increase have plunged sharply to around *17%*, after hovering above *60-70% just weeks ago.*
This drastic moderation is driven by two key factors:
*1. Mixed macro data:* A cooling in the U.S. jobs report - only 29K jobs added in September vs 84K expected - and underlying inflation figures which, while still high at 3%, show signs of gradual stabilization (below 3.3% forecast).
*2. More cautious messaging:* Comments from Fed officials - NY Fed President Williams and Vice Chair Jefferson - suggesting that the current monetary stance needs more time to be assessed before applying another adjustment. No urgency for back-to-back hikes.
For the digital asset ecosystem, this easing of restrictive pressure acts as a direct catalyst for liquidity and risk appetite.
As the odds of a rate hike unravel to 17%, the process is partially reversed: valuation multiple compression comes to a halt, and investors reduce their demand for extreme risk premium to enter assets like Bitcoin (BTC) or Ethereum (ETH).
*Conclusion:* The drop to 17% in the odds of a rate hike in October removes a major headwind for cryptocurrencies. However, the market will continue to be shaped by the trajectory of long-term bond yields and upcoming inflation data. For now, the crypto sector gains valuable room to consolidate support levels.
$BTC $ETH
