The October Hike Trade Just Died: 70% to 14% in Four Days, and Bitcoin Still Couldn't Hold $87,000

$87,152 Intraday. $84,501 at the Close.

Just 29,000 jobs helped finish a four-day collapse in October hike odds from 70% to roughly 13–14%. Bitcoin reached $87,152 on October 2, then closed at $84,501. The policy obstacle shrank. The rally vanished.

Why? September’s ETF buying had nearly stopped, leverage had built before payrolls, and long-term Treasury yields remained punishingly high. A softer Fed outlook could remove a threat without supplying the next buyer.

The 29,000 Came With Another 60,000 Erased

The BLS September report, released Friday, October 2 at 8:30 a.m. ET, showed unemployment rising from 4.1% to 4.2%. BLS characterized both employment and unemployment as “little changed.” Markets had expected more: CoinDesk’s consensus figures were 90,000 jobs and 4.1% unemployment.

August’s gain fell from 162,000 to 133,000. July flipped from +21,000 to −10,000. Together, the revisions removed 60,000 jobs from the earlier picture.

Wages weakened too: average hourly earnings rose 0.1% monthly, against 0.3% expected, and 3.0% annually, against 3.2% expected. The argument for another immediate hike had lost support across hiring, revisions and pay.

The Hike Trade Unraveled Before Friday

The baseline was already set: under Chair Kevin Warsh, the FOMC unanimously raised rates on September 16 by 25 basis points to 3.75%–4.00%, its first increase since July 2023.

The next meeting’s repricing came in stages:

• Week of September 28: October hike odds stood around 70%.
• September 29: New York Fed President John Williams said there was “no need for urgency,” sending the odds toward a coin flip that day.
• October 1: Vice Chair Philip Jefferson said policymakers needed “more time.”
• October 2, before payrolls: CoinDesk’s morning report put the probability around 30%.
• After payrolls: BTCRepublic’s account put CME FedWatch at 13–14%, versus roughly 18% on Kalshi.

Separately, Glassnode calculated 66% on September 28 and 22% at 15:00 UTC on October 2, using federal funds futures and the effective federal funds rate, as CryptoSlate reports. Different methods produced different estimates. None makes 70% Friday morning’s starting point.

The First Reaction Was Real. So Was the Reversal.

In CoinDesk’s immediate post-release account, Bitcoin held just below $87,000. The 10-year Treasury yield fell 7 basis points to 5.17%; the 2-year fell about 7 to 4.71%. Gold gained more than 1%, the dollar weakened, and Nasdaq futures rose 1.2%.

The full session told a harsher story. OpenBitcoin’s October 2 daily record reads:

Open $84,829 · High $87,152 · Low $83,873 · Close $84,501 (−0.4%).

Roughly $2,300 of upside from the open disappeared. October 1 had closed at $84,853 (+1.5%); October 3 recovered only to $84,747 (+0.3%).

October 5 Taipei-morning price-page snapshots span approximately $84,600–$85,200: CoinDesk showed $84,636.58, while CoinStats showed $85,182.49. Those are separate source snapshots, not one synchronized market quote.

The Squeeze Arrived Before the Jobs Report

The timing matters. Glassnode’s October 3 research, covered by CryptoSlate, identified $50 million of short liquidations in ten minutes at 04:20 UTC on October 2, about eight hours before payrolls.

Open interest increased $2.1 billion during the preceding 24 hours, or about 2.5% measured in coins. After the release, it fell $1.5 billion. By 15:40 UTC, Bitcoin was more than 1% below its immediate pre-release price.

A separate CoinDesk report citing CoinGlass measured open interest rising from 626,000 BTC on September 30 to roughly 653,000 BTC ($56.2 billion): 27,000 BTC, or $2.3 billion and 4.3%. Annualized perpetual funding climbed from about 3% to 10%. The late-September base, around 625,000 BTC, was near a 12-month low.

Its 24-hour liquidation snapshot totaled $344 million, versus $100 million previously, with longs and shorts split 28:72; BTC accounted for $132 million, ETH $70 million. Binance’s liquidation map highlighted $87,400.

These measurement windows differ. Together they support a rally driven chiefly by short covering and event positioning. Glassnode’s September 30 baseline put combined daily spot-exchange and US spot-ETF volume near $6.4 billion, close to the post-launch range’s low end. Fresh spot demand had not convincingly taken over.

ETF Demand Fell 97%. IBIT Hid the Damage.

CryptoCompass’s Farside-based weekly account puts US spot Bitcoin ETF inflows for September 28–October 2 at a provisional $82.9 million, down about 97% from $2.39 billion during September 21–25, the strongest week since October 2025. IBIT’s October 2 figure was still missing; the total is incomplete.

Across September 28–October 1, IBIT attracted approximately $292 million while all products combined took in just $51.2 million. Excluding IBIT, the rest collectively sold about $240.8 million. Available weekly figures put FBTC at −$167.9 million and GBTC at −$54.6 million.

October 1 exposes that dependence. FinanceFeeds’ SoSoValue tally was +$102.7 million, versus +$103 million in Farside’s presentation. In millions, the components were IBIT +195.6; FBTC −60.7; BITB −6.9; ARKB −7.7; BTCO −4.2; HODL −3.6; MSBT +7.0; GBTC −31.4; Grayscale Mini (BTC) +14.59; the others were zero.

TFTC’s October tracker provides the daily series. As of October 1, aggregate net assets were about $109.3 billion, with $57.6 billion in cumulative net inflows. That accumulated base does not establish today’s buying pace.

For context, September brought $2.65 billion and Q3 $6.34 billion, ending three quarters of outflows. Bitcoin gained 42.71% that quarter, its strongest Q3 since 2017. Meanwhile, the latest provisional ETH ETF week flipped from +$689.8 million to roughly −$118 million. The slowdown extended beyond Bitcoin.

A Cheaper Fed Path Still Leaves an Expensive Bond Market

Lower hike odds do not amount to an actual rate cut. Nor does a falling 2-year yield guarantee sustained relief farther along the curve.

The 10-year did fall on payrolls day. But 5.17% remained elevated after a recent 5.34%, approximately a 24-year high, according to Blockonomi’s bond-market preview. Glassnode’s observation was around 5.2%. The distinction is between a daily decline and a meaningful easing of long-term financial conditions.

That helps explain the transmission failure: less expected Fed tightening did not remove the high yield competing with risk assets, while ETF allocations supplied little additional demand.

The next test will be October 7’s $39 billion 10-year note reopening, with the size set out in Treasury’s financing plans. Auction demand will help show whether longer-term borrowing costs can ease too.

The US Calendar Will Test the Repricing

At this article’s October 5, 08:45 Taipei timestamp, every release below is still ahead:

• October 5, 10:00 a.m. ET: September ISM Services PMI will arrive Monday morning in the US. Consensus is near 55, versus August’s 55.4. August employment was 47.8 and prices 72.6. September manufacturing prices already rose from 71.1 to 77.9, making the forthcoming services prices reading particularly consequential.
• October 7: September FOMC minutes will be released, alongside the scheduled 10-year Treasury auction.
• October 9: Preliminary October University of Michigan sentiment and inflation expectations will follow. September’s benchmarks were 48.1 for sentiment, 4.6% for one-year inflation expectations and 3.4% for five-year expectations.
• October 14: September CPI will provide the next inflation test, including its effect on longer-dated yields.
• October 27–28: The FOMC will meet. The collapsed hike probability describes current positioning, not a decision already made.

Blockonomi’s weekly schedule covers the immediate releases; CoinDesk flags CPI, and BTCRepublic identifies the October meeting.

Three US Comment Deadlines Still Ahead

Comments will be due October 20 on the SEC’s Regulation Crypto Assets proposal, S7-2026-27; October 28 on IRS Notice 2026-62, docket IRS-2026-1255; and November 3 on the SEC’s transfer-agent modernization proposal, S7-2026-30.

The Missing Ingredient Is Broader Buying

Three readings will determine whether the repricing reaches Bitcoin: daily ETF net flows, the 10-year Treasury yield, and the October 27–28 FOMC meeting. Easier policy expectations are not buying power; this recovery needs ETF demand to spread from one dominant buyer back across the market.