- Bitcoin, Ethereum, and XRP fell after the Federal Reserve held interest rates steady at its October 2026 meeting, with the decision taking place on October 28, 2026.
- Crypto derivatives saw more than $365 million in liquidations across major assets, according to CoinGlass data, as a tech stocks selloff weighed on risk sentiment.
- Markets are now focused on upcoming US PCE inflation data and Bitcoin and Ethereum options expiry on Friday, October 30, 2026.
Bitcoin, Ethereum (ETH), and XRP extended their declines even after the US Federal Reserve kept interest rates unchanged. Traders are watching for a monthly close below $80,000 for Bitcoin as inflation worries, geopolitical pressure, and a cautious macro backdrop keep the broader crypto market on the defensive.
What Happened
The Federal Reserve’s Federal Open Market Committee (FOMC) voted 10-2 to leave rates unchanged. Two members, Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack, dissented in favor of a 25 basis point rate increase. Bitcoin initially moved above $81,000 following the decision, but the mood shifted during the press conference. Fed Chair Kevin Warsh struck a hawkish tone, pointing to elevated inflation, higher oil prices linked to the US-Iran conflict, and uncertainty about the future path of monetary policy. He did not rule out further tightening.
Market pricing responded quickly. According to CME FedWatch data, the probability of a rate hike at the December meeting rose to roughly 81%. US 10-year Treasury yields climbed slightly above 5% on Thursday, and the US dollar index (DXY) moved back toward 102.23.
Derivatives data showed heavy pressure on leveraged positions. CoinGlass reported more than $365 million in liquidations across major crypto assets, including Bitcoin, ETH, and XRP. Roughly $210 million came from long positions and more than $150 million from short positions over a 24-hour period, and more than 82,000 traders were liquidated. The largest single liquidation was a $6.53 million ETH-USDT short order on Binance. Bitcoin accounted for about $96 million of the total over the same window. Much of the selling coincided with a tech stocks decline driven by growing doubts about whether heavy spending on artificial intelligence will generate adequate returns.
Why It Matters
The reaction highlights how sensitive crypto has become to shifts in US monetary policy expectations. A hold on rates would ordinarily be seen as neutral or supportive for risk assets, yet the combination of a split vote, firm inflation signals, and the possibility of a December hike has pushed traders toward caution. Higher Treasury yields and a stronger dollar tend to reduce appetite for non-yielding assets such as Bitcoin, which is one reason the market has struggled to hold its gains.
The liquidation figures also point to fragility in leveraged positioning. When both long and short positions are wiped out in large numbers, price swings can intensify in both directions, which makes short-term moves harder to read. For investors, the episode underscores the importance of understanding how derivatives exposure can amplify volatility, particularly around macro events.
Market Context
Bitcoin has fallen nearly 7% during October 2026, a month that has been bearish for the asset. The current pressure follows a period in which crypto has been influenced by broader equity market performance and by macro data rather than by purely crypto-specific developments. The uncertainty around inflation has become a central theme, and the Fed’s preferred gauge, the PCE price index, is now seen as a key input for the next policy decision.
Economists expect core PCE inflation to rise 0.3% month over month for September. The annual PCE figure is forecast at 3.6%, up from 3.4% in the prior month. If these expectations hold, they would reinforce the hawkish message from the FOMC press conference and could keep pressure on risk assets.
Options markets add another layer. Deribit data shows more than 135,000 Bitcoin options with a notional value of $10.8 billion set to expire this Friday. The put-call ratio stands at 0.52, while Bitcoin’s max pain price is $78,000. Deribit data also indicates less than a 50% probability that Bitcoin expires above the $80,500 strike. For Ethereum, options worth $0.775 billion in notional value are due to expire, with a put-call ratio of 0.78 and a max pain price of $2,450, above the reported market price of $2,312. Max pain refers to the strike price at which the largest number of options would expire worthless, and it is often cited as a reference point during expiry weeks, though it does not guarantee where prices will settle.
What to Watch Next
- US PCE inflation data: The September readings, including core monthly and annual figures, will be central to expectations for the Fed’s December decision.
- Fed commentary: Any further remarks from Chair Kevin Warsh or other FOMC members on the possibility of tightening will shape rate-hike odds tracked through CME FedWatch.
- Treasury yields and the dollar: Movement in the 10-year yield, currently above 5%, and the DXY near 102.23 will indicate how financial conditions are tightening.
- Options expiry on Friday, October 30, 2026: Settlement of the Bitcoin and Ethereum contracts may influence short-term price action around the max pain levels.
- Bitcoin’s monthly close: Traders are watching whether Bitcoin closes October below $80,000, a level that would mark a notable shift in sentiment.
Source: original report
