The price of Bitcoin has dipped under US$80,000 as the crypto market retraces its minor gains following the Federal Reserve’s recent decisions, hampered by high bond yields, increasing oil prices, and a persistent cautious attitude toward riskier assets.
Currently, Bitcoin is trading near US$79,900, reflecting a decrease of approximately 1.2% for the day, having reached a low of US$79,644.
Although Bitcoin peaked at US$81,674 earlier today, it could not sustain those levels, falling below the critical US$80,000 threshold.
This drop positions Bitcoin nearly 5% lower for the week and signals another disappointing October, contrary to expectations of the usual “Uptober” surge.
Limited support from Fed pause
In an anticipated move, the Federal Reserve maintained US interest rates at 3.75%-4.00% overnight.
Nonetheless, this decision provided little lift to cryptocurrency values as economists reiterated concerns about persistently high inflation.
The voting resulted in a 10-2 split, with two officials advocating for a 25-basis-point hike, underlining ongoing speculation of future rate increases.
Following the announcement, US Treasury yields rose, keeping the 10-year yield above 5%.
Increased government bond yields enhance the appeal of stable, low-risk fixed-income investments compared to cryptocurrencies, exerting additional pressure on Bitcoin and similar assets.
Adding to these pressures, oil prices are rising again due to renewed anxieties surrounding Middle Eastern conflicts, which may perpetuate inflation concerns globally.
Decrease in ETF interest
The engagement of institutional investors has also noticeably declined compared to September figures.
Spot Bitcoin ETFs in the U.S. have seen considerable outflows throughout October, reversing the inflows that had occurred in the previous month.
This change indicates that Bitcoin has lost a vital source of demand that assisted its recovery in September.
Furthermore, long-term holders are increasingly facing unrealized losses after acquiring Bitcoin at higher prices, likely triggering more selling pressure when the coin tries to rebound.
Ethereum and other altcoins see declines
Ethereum’s price is hovering around US$2,305, down roughly 2% in the past 24 hours, and more than 6% for the week.
XRP has fallen to approximately US$1.29, declining by about 3%, while Solana has dropped just below US$100, trading at around US$99.60.
Overall, the downturn for leading altcoins has been steeper than that of Bitcoin, indicating ongoing caution towards the more speculative sectors within the cryptocurrency market.