Bitcoin Tests Key Support as Macro Risks Mount
TREE NEWS reports: Bitcoin fell below $80,000 over the weekend, trading at the lower end of its recent range. The drop was triggered by escalating tensions in the Middle East and ETF outflows in the latter part of last week, which forced the liquidation of leveraged long positions. The world’s largest cryptocurrency now sits at a critical juncture, with market participants closely watching this week’s Federal Open Market Committee (FOMC) meeting and a slew of major tech earnings.
Macro Backdrop: Fed and Big Tech in Focus
The FOMC meeting on October 27-28 is the week’s main event. The probability of a 25 basis point rate hike in October stands at 9%, while the odds for December are around 84%. This meeting will not include a dot plot, so investors will scrutinize Fed Chair Warsh’s press conference for signals on the future path of monetary policy. Meanwhile, the 10-year Treasury yield hovers near 4.96%, keeping pressure on risk assets.
On the earnings front, Microsoft and Alphabet report on October 28, followed by Amazon on October 29. Last week, Meta dropped 7% after raising its capital expenditure guidance, and the Nasdaq posted its worst single-day performance since June. These tech giants’ results could set the tone for broader market sentiment, with crypto often trading in tandem with high-growth stocks.
Technical Levels and On-Chain Data
From a technical perspective, Bitcoin’s immediate support lies at $78,000, with resistance at $86,000 and further hurdles at $88,000-$90,000. Glassnode data shows that ETF holders and treasury companies have an average cost basis between $80,000 and $81,500, making this zone a potential battleground between bulls and bears.
Ethereum is also under pressure, with support at $2,150 and resistance at $2,500. The ETH/BTC ratio has fallen to approximately 0.029, and ETH ETFs have seen net outflows for the fourth consecutive week, totaling $220.7 million. This persistent outflow suggests waning institutional demand for the second-largest crypto asset.
Forward-Looking Perspective
QCP Capital’s base case is that the Fed will hold rates steady, and Bitcoin will oscillate between $78,000 and $86,000. However, a hawkish surprise from the Fed or disappointing tech earnings could push BTC below the lower bound, potentially triggering further liquidations. Conversely, a dovish tone or strong earnings could reignite risk appetite. With volatility likely to remain elevated, traders should watch these macro catalysts closely.
