The Fed Pauses Rate Hikes—Can the Crypto Market Finally Breathe a Sigh of Relief?

The toughest part of this market cycle is that expectations for an October rate hike have fallen, yet the market has not relaxed. The Fed already raised rates by 25 basis points in September, bringing the rate to 3.75%–4%. The latest minutes show that most officials still believe another rate hike this year may be appropriate. A temporary pause is still a long way from easing.
Look at the actual data: During the Asian session on October 8, the U.S. Dollar Index was around 102.25, the U.S. 10-year Treasury yield rose to 5.303%, BTC was around $82,360, and ETH around $2,554. The probability of no rate hike in October has already reached 81.7%, but the dollar and Treasury yields remain elevated, and crypto assets are still under pressure.
My view is that going forward, we cannot focus only on whether rates are raised; we also need to see whether the liquidity environment improves. With a strong dollar and high yields, any rebound is likely to encounter selling pressure. Expectations of a rate-hike pause alone are not enough to confirm that the market has turned stronger.
The next key event is the U.S. CPI release at 20:30 Beijing time on October 14. Whether inflation can continue to cool is what will determine the market’s next adjustment in expectations. When trading at a time like this, what matters more than guessing the Fed is making sure you do not let your position gamble on the answer for you.
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