Crypto Market Pullback on Hawkish Fed Tone and Inflation Data – Bitcoin, Ethereum, XRP Under Pressure

Crypto Market Reaction to Fed’s Steady Rate Decision and Hawkish Tone

On Thursday, October 29, 2026, Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) experienced downward pressure amid a cautious market environment shaped by the Federal Reserve’s recent policy decision. The Fed opted to hold its policy rate steady at 3.75%-4.00% following its two-day October meeting, a decision that was not unanimous. Two officials favored a 25-basis-point hike, while Chair Kevin Warsh emphasized readiness to act depending on incoming data.

Despite the steady rate decision, the Fed’s hawkish tone, particularly its focus on price stability and inflation control, weighed on broader cryptocurrency sentiment. BTC slipped toward $80,000, ETH approached its 200-day Exponential Moving Average (EMA) at $2,316, and XRP traded below the $1.300 support level. These movements suggest increased risk of further losses if bearish momentum persists.

Inflation and Economic Data Supporting USD Strength

Supporting the cautious stance, US economic data released on the same day showed persistent inflation and stronger-than-expected growth. The annual Personal Consumption Expenditures (PCE) inflation rate rose to 3.6% year-over-year in September, up from 3.4% in August, aligning with market expectations. Monthly PCE inflation increased to 0.5% from 0.3%. Core PCE, which excludes volatile food and energy prices, rose 3.1% annually and 0.3% monthly.

Additionally, the US Gross Domestic Product (GDP) grew at an annual rate of 3.4% in the third quarter, according to the Bureau of Economic Analysis’ first estimate. This stronger economic backdrop has bolstered the US Dollar Index (DXY), which remained above 102, and kept the 10-year Treasury yield above 5%. These factors contributed to a preference for safe-haven assets and exerted downward pressure on riskier assets such as cryptocurrencies.

FXVNPro Market Perspective

The Fed’s decision to maintain rates but signal readiness to tighten further creates a nuanced environment for crypto markets. If inflation remains persistent and economic growth continues robustly, the Fed may feel compelled to raise rates in upcoming meetings, increasing borrowing costs and reducing liquidity. This scenario typically dampens appetite for risk assets, including cryptocurrencies, potentially leading to further price declines.

Conversely, if inflation shows signs of sustained moderation, the Fed might adopt a more dovish stance, which could ease pressure on cryptocurrencies. Technical levels such as Ethereum’s 200-day EMA at $2,316 and XRP’s $1.300 support are critical to watch, as breaches could signal deeper corrections or potential stabilization points.

Trading Scenarios

• If Bitcoin fails to hold near the $80,000 level amid continued hawkish Fed signals and inflation concerns, then it may face increased selling pressure, potentially testing lower support zones.
• If Ethereum maintains support around its 200-day EMA at $2,316 and broader market sentiment improves due to easing inflation data or Fed communication, then ETH could stabilize or rebound, attracting renewed buying interest.

What Traders Should Watch

• Upcoming US inflation reports and economic data releases for signs of persistent or easing inflationary pressures.
• Federal Reserve communications and meeting outcomes, particularly any shifts in tone regarding future rate hikes.
• Technical support and resistance levels for BTC, ETH, and XRP, including BTC near $80,000, ETH at the 200-day EMA ($2,316), and XRP around $1.300.
• Movements in the US Dollar Index (DXY) and Treasury yields, which influence risk sentiment and crypto market dynamics.

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