Bitcoin Recovers as Federal Reserve Rate Hike Odds Drop

Bitcoin experienced significant volatility on September 3, 2026, initially stalling near $77,000 before climbing 3.5 percent to $79,798. The early decline followed a late-August peak above $81,000 and was driven by rising US 10-year Treasury yields, high oil prices, and hawkish signals from Federal Reserve Chair Kevin Warsh, which led markets to assign a two-thirds probability to a rate hike this month.

Sentiment shifted later in the day as the likelihood of a quarter-percentage point increase on September 16 fell to 48.4 percent. This reversal was triggered by weak labor market data and dovish comments from a Federal Reserve official, resulting in a retreat of the U.S. dollar and easing sovereign bond yields. The overall cryptocurrency market capitalization rose to $2.64 trillion, with gains extending to BNB, XRP, and Solana.

Institutional flows mirrored this volatility. Bitcoin spot ETFs recorded $236.5 million in net outflows on September 1, but reversed course on Wednesday with $101 million in net inflows, led by the BlackRock iShares Bitcoin Trust ETF. Meanwhile, Ether ETFs maintained a 12-session streak of positive flows, with products from BlackRock and Fidelity Investments continuing to attract capital. On-chain data from Glassnode indicates that while the pace of accumulation has slowed, holders remain net buyers.