After 24 hours of storm on the financial markets, the tide is suddenly turning for investors. While an unexpected overheating of American inflation raised fears of the worst, tension eased on the prediction markets. Between panic on Fed rates in October and relief on derivatives, Bitcoin is entering a decisive arbitrage phase.
In brief
- The risks of a Fed rate hike in October collapse to 13% on Polymarket.
- The massive liquidations suddenly decrease, allowing the price of Bitcoin to stabilize.
- The absence of an aggressive announcement from Kevin Warsh reassures institutional investors and the markets.
- Investor enthusiasm persists strongly, illustrated by spectacular movements of traders in Taiwan.
Fed rate hike in October, the spectacular reversal on Polymarket
The start of the week was marked by a drop in bitcoin and strong macroeconomic nervousness. Following recent data on US inflation (CPI at 3.7% and soaring PPI), speculators feared that the Federal Reserve (Fed) would change its monetary trajectory. The Polymarket platform immediately reacted by raising the probability of an interest rate hike in October to a worrying high of 48.5%.
However, recent neutralist signals from the Fed’s Kevin Warsh have quickly reversed the trend. The likelihood of monetary tightening in October has collapsed to historic lows, removing the specter of an imminent rate hike.
| Macro/Market Indicator | Panic Summit (Post-ICC/PPI) | Current Situation (Post-Fed) | Market Impact |
| Probability Rate hike (Fed) | 48.5% on Polymarket | 13.5% (CME / Polymarket) | Sharp drop in fears |
| Probability Status Quo (Pause) | ~51.5% | 85% to 86% | Preferred central scenario |
| Crypto liquidations over 24 hours | Nearly $1 Billion vert{} $311 Million | Lever bleeding & Stabilization | |
| Outlook Rate cut (Horizon Q4) | Reported by the market | Postponed to the end of 2026/2027 | Short-term volatility |
Appeasement of crypto derivatives and FOMO in global markets
This spectacular drop in expectations of a rate hike immediately brought calm to the digital asset market. The purge of open positions has stabilized, allowing the bitcoin price to firmly defend its major support zones. This cleaning of the excessive lever provides healthier ground for further operations.
Meanwhile, global bullish momentum continues to attract investors. In Taiwan, Bloomberg analyst Eric Balchunas reports an unprecedented FOMO phenomenon, that of institutional fund managers resigning en masse to make day trading personally and benefit from the boom in the stock markets. But what about bitcoin?
What will the Fed’s decision mean for bitcoin?
In the short term, the confirmation of a monetary pause by the Fed by the end of October should offer a real breath of fresh air to the crypto market. If the American central bank avoids any increase in rates, the reduction in bond volatility could encourage a gradual return of capital to bitcoin and Ethereum, with the objective of retesting higher resistances.
Longer term, the trajectory remains dependent on global liquidity. If inflation refuses to fall sustainably and postpones any prospect of a rate cut until next year, bitcoin could move into a broad consolidation channel. Nonetheless, current accumulation by large carriers during downturns suggests that institutional investors are already anticipating a powerful year-end rally.
The fear of a rate rise recedes and gives some fresh air to bitcoin. After a beneficial purge on derivatives, the market regained its stability. If the Fed confirms its status quo in October, the newfound liquidity could propel crypto and BTC to new highs.
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