Bitcoin traded near $82,060 on Friday morning in Asia, up 0.7% over 24 hours, as cautious recovery signals emerged despite the Federal Reserve’s tightening cycle. Ether rose 1.1% to about $2,436, while total crypto market capitalization stood at $2.86 trillion.
The move followed Wednesday’s US consumer price data, which showed headline inflation at 3.7% year-over-year and core inflation at 2.6% for September, both one-tenth above forecasts. Bitcoin briefly slipped below $82,000 as traders raised expectations for a second consecutive Fed rate hike at the October 27-28 meeting after September's quarter-point increase to a target range of 3.75% to 4%.
Those bets eased Thursday after Fed Governor Michelle Bowman said the central bank could wait to watch how markets and the economy respond, and San Francisco Fed President Mary Daly said another increase would likely be needed but there was "no urgency to act." Fed funds futures subsequently showed the probability of an October hike falling to 32% from 54%, while the 10-year Treasury yield declined to about 5.08%, its lowest since Sept. 25.
Institutional demand remained soft. US spot bitcoin ETFs recorded net outflows of $261.4 million on Wednesday after inflows of $175.7 million on Tuesday, with preliminary data showing another $7.6 million in outflows on Thursday. BlackRock's IBIT has fluctuated between inflows and outflows, with outflows in five of the past seven trading days.
A report from Glassnode and Coinbase Institutional noted Bitcoin is showing early recovery amid Fed tightening, with a constructive but cautious near-term outlook. Analysts suggest a Fed pause in October could give Bitcoin room to retest the $84,000 level, while another hike would keep pressure on risk assets.
