Bitcoin (BTC) traded near $82,000 as Wall Street opened on Friday, with crypto markets stabilizing alongside a rebound in South Korean stocks after a week of steep losses.

South Korean equities rebounded 2% on the day, easing Bitcoin price volatility after a sharp sell-off. Federal Reserve Chair Kevin Warsh, for his part, gave no indication of further interest-rate hikes during a public discussion, prompting traders to lower the odds of a 25-basis-point increase in October to 15%. Analysts also warned of difficult choices ahead for Washington as the 10-year US Treasury yield climbed back to 5.13% and US stocks traded in a narrow range. Rate expectations sit near the center of that picture: the path of Fed policy shapes the liquidity backdrop against which risk assets trade, making the chair's public remarks a recurring input for crypto and equity positioning.

Traders see dovish edge to Warsh comments

Data from TradingView showed BTC/ holding most of its reclaimed ground after bouncing at $80,000 on Thursday.

BTC/USD four-hour chart. Source: Cointelegraph/TradingView

The earlier decline followed a weeklong sell-off in South Korean technology stocks, although Friday's Asian trading session brought some relief. The KOSPI Composite Index closed at 5,668, up 2% on the day but still down 8.3% for the week.

KOSPI Composite Index one-day chart. Source: Cointelegraph/TradingView

US stocks largely avoided the sell-off in Asian markets but traded mixed on Friday, with the tech-heavy Nasdaq Composite Index down 0.5% and the S&P 500 up 0.5%.

Warsh offered investors some relief by steering clear of any mention of further rate hikes during a discussion with International Monetary Fund (IMF) Managing Director Kristalina Georgieva.

"I don't prejudge meetings. I don't believe in saying now what I might do at the meetings that we have in the balance of this year," he said.

Markets appeared to take Warsh's tone as a dovish signal on rate hikes. Data from CME Group's FedWatch Tool showed the probability of a 25-basis-point hike at the October meeting falling to 15%, down from 27% the previous day. Futures-implied odds of this kind are a standard barometer of market expectations heading into FOMC meetings, and with the chair declining to preview any remaining decisions this year, attention turns to upcoming US data and further Fed communication for the next read on where that pricing settles.

Fed target-rate probabilities for October FOMC meeting (screenshot). Source: CME Group

Economist Robin Brooks suggested that stress in the AI sector, a key driver of the South Korean sell-off, could be at the heart of the Fed chair's more reserved approach.

"Warsh gave no indication the Fed's in any hurry to hike, so the October meeting is now pretty much off the table in terms of a hike," he wrote in a blog post, adding:

"What's helping the Fed is fears of an AI blow-up, which is making markets more receptive to a dovish message."

US bond yields eye rebound as stocks halt upside

Elsewhere, US bond yields began rising as stocks steadied, prompting suggestions that the US Treasury may ultimately be forced to choose between taming the bond sell-off and keeping stocks bullish. The 10-year yield serves as a benchmark discount rate for risk assets and a reference point for borrowing costs across the economy, which is why its trajectory is watched closely in both crypto and equity markets. The US 10-year yield stood at 5.07% on Friday, having briefly climbed back to 5.13%.

US 10-year bond yield one-day chart. Source: Cointelegraph/TradingView

Related: Bitcoin may seek 20-month trend line reclaim before new record highs: CryptoQuant

Market commentator The Kobeissi Letter noted that stock weakness has been the sole source of bond-yield corrections since August. In an X analysis published Thursday, the outlet suggested equities may be in a paradoxical "'bull-bear' market."

Without the US-Iran war, stocks would be far higher, it argued, adding that persistent inflation was driving investor demand for asset exposure, even as the Fed began a new rate-hike cycle.

"Even as the S&P 500 hits year #5 of its bull market, we believe a steep discount is currently priced into equities. This discount has functioned as a 'stealth' bear market, suppressing equity valuations in the world's largest and fastest-growing companies," it concluded, adding:

"This backdrop has the ability to catalyze a violent rally in the S&P 500 if and when it is ultimately priced-out."

S&P 500 average bull-market returns comparison. Source: The Kobeissi Letter on X.com