Bitcoin Slides To $83,200 With Fed Risks Back In Focus

The price of bitcoin fell back to around 83200 dollars after crossing the 86000 dollar threshold at the start of the week. Indeed, the rise in bond yields and the probability of a Fed rate hike put an end to this recovery.

Bitcoin price erases part of its gains

This Monday, bitcoin had approached $86054, its highest level in eight months. This move was supported by capital inflows into ETFs, renewed risk appetite, and forced covering of short positions.

Then, the momentum reversed. BTC briefly returned to around $83200 during Asian trading after a rejection near $87000. Despite this decline, it maintains a gain of nearly 7.35% since the beginning of September.

Many figures justify the return of macroeconomic tensions :

• Bitcoin has dropped over $3,000 since its recent peak ;
• The ten-year US yield surpassed 5.1 %, a level unseen since 2007 ;
• The thirty-year rate reached 5.44 %, its highest since 2004 ;
• The probability of a rate increase in October now exceeds 75 % ;
• This probability was still around 49 % a week ago.

Outside of bitcoin, other assets were also penalized. Nasdaq 100 futures lost nearly 1%, while S&P 500 futures fell 0.6%. This development confirms a risk reduction movement simultaneously affecting cryptos and tech stocks.

The Fed could raise rates once again

The Federal Reserve raised its key rate by 25 basis points on September 16th. The target range now stands between 3.75% and 4%, after the first US hike in over three years.

The monetary committee justified its decision with persistently high inflation. It also highlighted the strength of economic activity, domestic spending, and the labor market. These elements reduce the need to quickly ease financial conditions.

Recent business activity data reinforced this view. They suggest that US demand remains strong enough to sustain price pressures. At the same time, the rise in oil renews the risk of energy-related inflation.

WTI crude climbed to around $93.57 per barrel, while Brent surpassed $105. More persistent inflation could prompt the Fed to act again at its October 28 meeting.

Bond yields weigh on cryptos

The rise in US yields strengthens the competition between bonds and risky assets. When federal debt offers a yield above 5%, some investors reduce their exposure to stocks and cryptocurrencies.

High rates also increase credit costs and can support the dollar. Bitcoin often struggles when the greenback and real yields rise simultaneously.

Nonetheless, BTC shows some resilience. James Stanley, macroeconomic analyst at FOREX.com, observes:

“Bitcoin holds up well despite rising rates and the strength of the dollar.”

This strength remains relative. The recent rally benefited from significant short position liquidations. Once this technical effect is exhausted, the market will need spot purchases and steady flows into ETFs to sustain the rise.

The $81000 to $83000 zone becomes decisive

James Stanley identifies $82833 as the next level to watch. Other analysts place the main support zone between $81000 and $82000, the former resistance broken during the rally.

Staying above this zone would preserve the possibility of consolidation before another attempt toward $86000 or $87000. A clear break would weaken the movement and bring the psychological $80000 threshold back into focus.

However, this reading is technical analysis, not a guaranteed outcome. In the short term, employment statistics, oil prices, and bond yields should weigh more than chart patterns.

The next move of the bitcoin price will therefore depend as much on crypto market flows as on expectations around the Fed. A decline in rate hike probabilities could revive risk appetite. Their rise would expose BTC to a deeper correction.