After the inflation report was released on Wednesday, market bets on the Federal Reserve raising interest rates in October soared to nearly 50%, but have since declined.

After U.S. inflation data exceeded expectations, reigniting concerns in the market that the Federal Reserve might raise interest rates in October, Bitcoin fell below $81,000.

After the inflation report was released, the market initially priced in a 50% probability of a rate hike in October, which then fell to around 26% to 30%.

Weaker institutional demand, including a net outflow of $150.5 million in US spot Bitcoin on October 14th ETF, as well as broader economic uncertainties, are suppressing liquidity and risk appetite.

CoinDesk data shows that Bitcoin, the largest cryptocurrency by market capitalization, BTC traded at $81,499.86, and fell below $81,000 in early trading on Thursday, dropping nearly 1% from midnight UTC. On Wednesday, the price approached $80,000 before briefly rebounding to around $81,500, but most of this gain was lost during the Asian trading session. In the past 24 hours, the price has fallen by more than 2%.

Ethereum ETH traded at $2,359.13, while tokens such as XRP ( XRP ) and Solana ( SOL ) fell by 3.5% to 4%. PYTH is the only token among the top 100 cryptocurrencies to still see a gain of over 7%.

Data released on Wednesday showed that the consumer price index in September rose by 3.7% over the past 12 months, higher than 3.4% in August and also exceeding economists' expectations. Excluding food and energy prices, the core CPI rose by 2.6%, up from 2.4% the previous month.

The market quickly repriceed the probability of Federal Reserve actions. On the forecasting platform Polymarket, after the release of CPI, the probability of a rate hike in October soared to nearly 50%, before falling back to around 30%. The FedWatch tool on CME also showed a similar trend: the probability of a rate hike initially jumped from about 22% to nearly 47%, and as of press time, it had fallen back to 26%.

The CEO of Indian exchange Giottus, Vikram Subburaj, stated: "Stronger inflation data from the United States has once again raised concerns that interest rates will remain high for a longer period. Inflation rates rose to 3.7% year-on-year in September, increasing uncertainty about the next steps the Federal Reserve will take. Institutional demand remains fragile as well. US spot Bitcoin ETF saw a net outflow of $150.5 million on October 14, reversing the previous day's net inflow of $175.7 million."

Market maker STS Digital indicates that this uncertainty may drag down the liquidity of various markets.

In an email sent to CoinDesk, the company Anderson stated: "As the outcome of the next FOMC meeting is almost unpredictable, this uncertainty is damaging liquidity and weakening the risk appetite across all asset classes."

However, Anderson believes that the Federal Reserve will maintain interest rates unchanged this month, which is consistent with the probability of over 70% in the pricing of federal funds futures as of the time of publication by CME to maintain the status quo.

He added, "Although there has been optimism regarding digital assets recently, tokens now seem to be more susceptible to macroeconomic factors. Energy shocks, fluctuations in fixed income, and the valuation of AI are all dragging down market sentiment."

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