Bitcoin rose above $80,000 following the release of the latest US inflation data, which came in line with market expectations for September. The price action unfolded as investors reacted to both macroeconomic data and ongoing uncertainty regarding US Federal Reserve policy and tensions between the US and Iran.
US inflation and Fed’s interest rate stance
The Bureau of Economic Analysis reported that the Personal Consumption Expenditures (PCE) price index rose 0.5% in September and 3.6% compared to the same period last year. This measure, closely watched by the US central bank, rose from August’s annual reading of 3.4%.
Headline PCE inflation also climbed, matching economists’ forecasts. The core PCE index, which excludes volatile food and energy prices, increased by 0.3% on the month and 3.1% year over year. Despite aligning with predictions, these figures remained well above the Federal Reserve’s 2% target.
The Federal Reserve maintained its policy rate between 3.75% and 4.00% on October 28, citing persistent inflation and a need to review further economic indicators before making additional adjustments.
According to the latest Fed statement, two members supported a further quarter-point interest rate hike. This followed the previous 25-basis-points increase in September. While the central bank’s decision initially provided a brief boost to Bitcoin’s price, investors remain uncertain about the Fed’s next moves.
| Indicator | September Value | August Value | Fed Target |
|---|---|---|---|
| Headline PCE YoY | 3.6% | 3.4% | 2% |
| Core PCE YoY | 3.1% | 3.1% | 2% |
| Fed Funds Rate | 3.75%-4.00% | 3.75%-4.00% | N/A |
Volatility in Bitcoin and liquidation events
Bitcoin’s price experienced sharp swings around the inflation release and the Fed announcement. The cryptocurrency initially climbed above $80,000, briefly made a run at $84,000 resistance, but was unable to hold above that level.
CoinGlass data recorded $342.38 million in liquidations during the day, with 83,748 traders involved. Of the total, long positions accounted for about 65% of the liquidation value.
Some analysts linked this volatility to investment flows shifting toward interest-bearing assets, which could become more attractive as rates rise.
Mini dictionary: CoinGlass is a cryptocurrency data and analytics platform that provides real-time information on derivatives liquidations, open interest, funding rates, and market sentiment for major cryptocurrencies.
Analyst perspectives and technical outlook
Michaël van de Poppe, a well-known crypto market analyst, discussed Bitcoin’s inability to break strong resistance near $84,000 and pointed to a series of lower highs forming in the price charts.
Van de Poppe’s chart identified primary support and resistance levels for Bitcoin, highlighting $80,920 and $82,938 as upside targets, while $79,172, $78,416, and $76,269 were key downside zones in case of further selling.
At the time of publication, Bitcoin hovered near $80,000 but had not achieved a decisive break through resistance. The analyst emphasized that reclaiming $80,920 would be necessary for a clear bullish reversal in the short term. Without this, the technical outlook remained uncertain.
Ethereum market dynamics and whale activity
Ethereum was trading around $2,322, reflecting a decline of about 1.7% from the previous session and failing to maintain its recent move above $2,400.
Analyst Ali Martinez reported that large holders, often referred to as whales, reduced their Ethereum holdings by approximately 160,000 ETH, worth over $348 million, in the previous days. Martinez also observed a further 100,000 ETH increase in exchange balances, potentially raising the supply available for sale.
SoSo Value indicated that weekly outflows from Ethereum ETFs reached about $170 million as Bitcoin made its recovery attempt, suggesting shifting investor sentiment.
The technical chart provided by Martinez signaled a breakdown from an ascending broadening formation, suggesting that the next key support for Ethereum could lie just above the $2,000 level.
Traditional markets and geopolitical factors
Major US technology stocks were also under pressure, with Alphabet’s earnings report falling short of analyst forecasts. The company reported $127.58 billion in quarterly earnings compared to expectations, and its operating income came in at $40.58 billion, below projections.
Samsung’s stock also declined after disappointing results from its semiconductor division.
Investors continued to monitor developments around potential US-Iran negotiations, though no progress toward a peace agreement had been confirmed.
