Bitcoin holds above $80,000 as Fed rate-hike odds fall to 50%

Bitcoin traded near $81,000 on Friday, up roughly 5% over 24 hours, after traders slashed September rate-hike odds to a coin-flip at 50%, down from 70% a day earlier.

Federal Reserve Governor Christopher Waller said he would favor holding the benchmark rate at the September 15-16 FOMC meeting if upcoming data shows the "disinflationary process" resuming, according to remarks at a virtual event. His dovish lean contrasts with Fed Chair Kevin Warsh, who faced a divided market on the hike question at Jackson Hole.

The repricing was abrupt. CME FedWatch now splits the September 16 decision almost evenly between holding at 3.50-3.75% and lifting a quarter point to 3.75-4.00%, after assigning the hike a 70% probability Thursday and just 37% a week earlier. A second move to 4.00-4.25% is no longer the most likely outcome until the March 2027 meeting, pushed back from December 2026. The odds have whipsawed with oil prices and bond yields tied to the Iran conflict, while US initial jobless claims rose more than expected, corroborating a cooling labor market.

The lower hike odds eased pressure on Treasury yields and the dollar, with the US Dollar Index falling about 0.5% to its lowest since August 26. That backdrop helped Bitcoin break above $80,000 this week and extend to roughly $80,841, up more than $2,400 from a session low near $77,200. US spot Bitcoin ETFs recorded net inflows of about $3.5 billion in August, the largest single-month total in over a year, according to fund data. Ether climbed over 4.8% to about $2,494 as the move broadened across crypto, while crypto-linked equities such as Strategy and Robinhood rallied more than 12% and 15% respectively.

Traders now watch whether Bitcoin can defend $78,670, a level it reclaimed that serves as near-term support, with the 200-period exponential moving average at $73,638. Resistance sits at $81,300-$81,800, and a sustained move above $82,000 could open a path toward the mid-$80,000 range. The 14-period RSI at 72.13 flags overbought conditions that raise the risk of a short-term pullback. Bitcoin's 90-day correlation with gold has climbed to its highest since 2020 while its link to the S&P 500 has fallen near zero, a sign investors are trading it as a scarce monetary asset rather than a high-beta tech play. The August nonfarm payrolls report, due in coming days, and the next inflation print will likely decide the September outcome — and with it whether Bitcoin's hold above $80,000 survives the FOMC meeting.

This article is for informational purposes only and does not constitute investment advice.