Bitcoin, Ethereum, XRP Rally Falters as Fed Rate Hike Odds Hit 86%

A looming Fed rate hike threatens the fragile rally across Bitcoin, Ethereum and XRP. Traders raised the odds of a Fed rate hike at the September 16 meeting to 86.5%, according to the CME FedWatch tool. The shift follows fresh inflation data and puts pressure on the broader crypto market this week.

Bitcoin Faces Fed Rate Hike Pressure Before FOMC Meeting

The probability of a Fed rate hike jumped from near 70% before the August inflation report. U.S. CPI inflation rose 3.4% year-over-year in August, fueling the shift. A hike would mark the first increase in three years and signal a tighter policy stance.

Fed policymakers do not fully share this outlook, based on a recent Bloomberg survey of officials. Fewer than 13% of 48 respondents expect a rate increase at the September meeting. Most economists also see no change at the December 2027 decision either.

Bitcoin's chart structure still points toward higher levels despite the Fed rate hike concerns. Analyst Michaël van de Poppe expects a period of consolidation before the next upward push. He projects a move toward the $90,000 to $92,000 resistance zone, and bull markets typically avoid sharp pullbacks.

Ethereum Approaches $3,000 Despite Fed Rate Hike Concerns