Bitcoin and global equity markets faced renewed selling pressure after stronger-than-expected U.S. inflation figures fueled speculation that the Federal Reserve could raise interest rates in October. Market expectations for a rate increase briefly approached 50% following Wednesday’s data release before declining.

Bitcoin, the largest cryptocurrency by market capitalization, has fallen 1% since midnight UTC. The price came close to $80,000 during early Asian trading before staging a short-lived recovery toward $81,500. That rebound subsequently weakened, with BTC trading near $81,000, according to CoinDesk data. Bitcoin has lost more than 2% over the past 24 hours.

Losses were more pronounced across several major altcoins. Ether, XRP and Solana dropped between 3.5% and 4%. PYTH was the only cryptocurrency among the top 100 by market capitalization still recording gains of more than 7%.

Pressure also spread across traditional financial markets. Nasdaq futures declined 1% at the time of writing, extending Wednesday’s 2% drop. South Korea’s KOSPI index tumbled 8%, prompting the activation of circuit breakers amid the sharp selloff.

Data released Wednesday showed that U.S. consumer prices increased 3.7% over the 12 months through September, up from 3.4% in August and above economists’ expectations. Core CPI, which excludes food and energy, rose 2.6%, accelerating from the previous month’s 2.4% reading.

The inflation report prompted traders to rapidly adjust their expectations for the Federal Reserve’s next move. On prediction platform Polymarket, the probability of an October rate hike briefly surged to nearly 50% before falling to around 30%. CME’s FedWatch tool showed a comparable shift, with the implied odds climbing from approximately 22% to almost 47% before retreating to 26% at the time of writing.

Vikram Subburaj, chief executive of India-based crypto exchange Giottus, said the latest inflation figures had revived concerns that interest rates could remain elevated for an extended period. With annual inflation reaching 3.7% in September, uncertainty surrounding the Federal Reserve’s upcoming policy decision has increased, he said.

Subburaj also highlighted signs of fragile institutional demand for Bitcoin. U.S. spot Bitcoin exchange-traded funds recorded $150.5 million in net outflows on October 14, reversing the $175.7 million in inflows registered during the previous session.

Market-making firm STS Digital warned that uncertainty over the Federal Reserve’s decision could weaken liquidity and reduce investors’ willingness to take risks across financial markets.

“With the next FOMC a coin flip, this uncertainty is damaging liquidity and dampening risk appetite across all asset classes,” STS Digital’s Anderson told CoinDesk in an email.

Despite the uncertain outlook, Anderson expects the Federal Reserve to leave interest rates unchanged this month. This view aligns with CME Fed funds futures, which indicated a probability of more than 70% that policymakers would maintain the current rate at the time of writing.

Anderson added that digital assets have become increasingly sensitive to macroeconomic developments despite recent optimism in the cryptocurrency market. Energy price shocks, volatility in fixed-income markets and concerns over artificial intelligence valuations are adding to the pressure on investor sentiment.