US inflation and Fed rate expectations supported the crypto market
Bitcoin started October with a price recovery after a volatile end to September, approaching the $87,000 mark. The market received support from new US inflation statistics and a decrease in the likelihood of a Federal Reserve interest rate hike. This was reported by Minfin citing Reuters, according to the portal PromPolitInform.
In August, the PCE consumer expenditure index increased by 3.4% year-over-year, while the core figure settled at 3%. The published data turned out better than market expectations, which helped alleviate participant concerns regarding another round of monetary tightening by the American regulator.
Fed Rate Dynamics
Following official statements from Federal Reserve officials, traders estimated the probability of a rate hike at the October meeting at approximately 25%. A week earlier, this figure stood at about 70%, creating substantial pressure on market assets. Lower rate expectations traditionally have a positive impact on risk assets, particularly cryptocurrencies.
Impact of Spot ETFs
An additional support factor came from American spot Bitcoin exchange-traded funds, which demonstrated significant capital inflows. Before the end of September, nine consecutive trading sessions recorded fund injections totaling approximately $3.1 billion. At the same time, on September 30, the situation shifted, and the market recorded a capital outflow of $148.7 million.
Current Market Situation
The beginning of October is shaped by softer expectations regarding the actions of the American central bank, more favorable inflation figures, and institutional demand through exchange-traded funds. However, the market remains highly sensitive to upcoming macroeconomic publications, particularly official reports on the labor market in the United States.
Photo: Minfin
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