Bitcoin Dips Below $80,000 Ahead of Fed Decision, Midterms

In brief Bitcoin briefly fell below $80,000 over the past day, touching about $79,330, before recovering to trade at $80,264, down 2.7% on the week, per CoinGecko. U.S. spot Bitcoin ETFs saw more than $773 million in net outflows on Thursday and Friday, leaving October on course for a net loss. Analysts warned of further volatility ahead of the Federal Reserve's decision on Wednesday and the U.S. midterm elections on November 3. Bitcoin slipped below $80,000 over the past 24 hours, as a sell-off in technology stocks and nervousness ahead of the Federal Reserve's rate decision weighed on risk assets.The leading cryptocurrency fell as low as $79,332 before recovering to $80,240, down 2.5% over the past week, according to CoinGecko data. It remains about 36% below its all-time high of $126,080.U.S. spot Bitcoin ETFs saw $635.5 million in net outflows on Thursday, wiping out most of the gains from a three-day run of inflows, followed by a further $137.9 million on Friday, according to SoSoValue. Even so, the funds ended the week up about $301 million, snapping a two-week losing streak, though they remain down about $314 million for October.Tim Sun, senior researcher at HashKey, said the drop was "primarily driven by a broader correction in global risk assets," with growing skepticism toward AI-related technology stocks a major factor."Investors are not necessarily questioning the long-term prospects of artificial intelligence, but rather whether current elevated valuations can be justified by future earnings and cash flows," Sun told Decrypt. Outflows from spot Bitcoin ETFs and the unwinding of leveraged positions "further amplified the downward pressure," he said.Daniela Hathorn, senior market analyst at Capital.com, said Bitcoin had come under pressure alongside tech stocks. "Persistent inflation, elevated Treasury yields and expectations of further Federal Reserve tightening have reduced enthusiasm for speculative assets," she told Decrypt.Myriad: How high will Bitcoin go? Click to make your prediction.Bitcoin's key levelsStephen Wundke, strategy and revenue director at quantitative investment firm Algoz, said $80,000 was a psychologically important mark for many investors, but warned that a break below it could be misleading, given low trading volumes over weekends.More worrying, he said, was a broader decline in trading volumes as investors pull out of altcoins and park funds in stablecoins. Bitcoin needed to hold the $82,000 level from which it launched rallies in August and September to support the bull case, and staying below it "could see a broader pullback in the coming weeks while the macro uncertainty remains," he said."The bull case for Bitcoin is not dead but it is keeping its head below the parapet whilst so many stray bullets are flying across the globe," Wundke added.Sun said that if Bitcoin falls further, he sees $75,000 as a key support level to watch, and expects volatility to stay elevated.Hathorn said the Fed's decision on Wednesday and major technology earnings "could prove just as important for Bitcoin as developments within the cryptocurrency market itself." A more hawkish Fed could strengthen the dollar and weigh on risk assets, she said, while "Bitcoin's recovery may remain fragile unless stronger institutional demand accompanies any improvement in broader market sentiment."Daily Debrief NewsletterStart every day with the top news stories right now, plus original features, a podcast, videos and more. Join 72,000+ readersCreate an account to save your articles.