Crypto Market Outlook: Fed Hike Odds Fall, Bitcoin Eyes $85K

Key Insights:

• Crypto market outlook shifted after softer U.S. PCE inflation pushed October Fed rate hike odds down to about 37%.
• October Fed rate hike odds fell to about 37%, while Goldman Sachs shifted its next-hike forecast to December.
• Bitcoin traded near $84,000, leaving the $85,000 area as the next short-term resistance zone.

The crypto market held near recent levels on Oct. 1 as traders reduced expectations for another Federal Reserve rate hike in October. Bitcoin traded near $84,000 after softer August inflation data lowered the market-implied probability of a hike.

CME FedWatch data showed traders assigning about a 37% probability to a 25-basis-point increase at the Oct. 27-28 meeting. The implied probability of no change stood near 63%.

Crypto Market Outlook Improves as Fed Hike Odds Fall

The crypto market showed a limited immediate reaction to the inflation report. The Federal Reserve closely tracks personal consumption expenditures inflation when assessing price pressures.

According to the U.S. Bureau of Economic Analysis, the PCE price index rose 0.3% in August and 3.4% from a year earlier.

Core PCE, which excludes food and energy, increased 0.2% month over month and 3.0% year over year. The softer readings reduced pressure for another immediate rate increase, but inflation remained above the Fed’s 2% target.

By Sept. 30, CME FedWatch data put the probability of an October rate hike near 37%, down from roughly 51% earlier in the week. The Federal Open Market Committee will announce its next policy decision on Oct. 28.

ALSO READ: Bitcoin Price to Benefit from Fed Rate Hike? Here’s What Experts Believe

Goldman Sachs Delays Fed Hike Call to December

Goldman Sachs shifted its forecast for the next Federal Reserve rate hike from October to December after the softer inflation report. The bank had previously expected a 25-basis-point increase at the October meeting.

The revised call reduced one near-term macro risk for the crypto market, but it did not remove rate uncertainty. Federal Reserve officials remained divided over how quickly inflation could return toward target.

Bitcoin Price Near $84K as Crypto Market Awaits Jobs Data

Bitcoin remained near $84,000 on Oct. 1, keeping $85,000 as the nearest resistance area. A sustained break above that zone could strengthen short-term momentum across larger crypto assets.

The next major U.S. catalyst is the September employment report, due on Oct. 2. A stronger jobs reading could revive October hike expectations, while weaker data could reinforce the case for a pause.