TL;DR
- Bitcoin fell to $79,250 following a 9.3% weekly correction, its steepest decline since the low recorded in July.
- Bitfinex identified a support zone between $77,000 and $77,765. A recovery above $82,500 could pave the way for another rally.
- The Fed will announce its interest rate decision on October 28. Markets expect rates to remain unchanged, although the probability of a December hike has increased.
Bitcoin fell to $79,250 last week, recording a 9.3% correction, its steepest pullback since the lows reached in July, according to the latest report from Bitfinex.
The decline pushed BTC below $81,300, a level that previously served as support and now acts as resistance. Analysts identified a structural support zone between $77,000 and $80,000.
The correction occurred ahead of the Federal Reserve’s (Fed) interest rate decision, scheduled for October 28, and the release of several US economic indicators.
Bitcoin Finds Support Between $77,000 and $77,765
Bitfinex places the main immediate support between $77,000 and $77,765, a zone associated with the average acquisition cost of large investors and the True Market Mean indicator.
During the latest rally, Bitcoin approached $84,374, a level associated with the institutional cost basis. The advance was accompanied by inflows into ETFs, although some short-term investors subsequently took profits.
Open interest in derivatives markets remained around 669,253 BTC, while approximately 65% of the circulating supply remained in profit.
According to Bitfinex, a sustained recovery above $82,500, where short positions vulnerable to liquidation are clustered, could signal the end of the consolidation phase. That would also require renewed demand for ETFs.
The Fed and Tech Earnings Will Be Key Market Drivers
Expectations for US interest rates have changed over the past month. The probability of an October rate hike fell from 64.2% to 9.4%, while the likelihood of an increase in December reached 72%.
Although the Fed is expected to leave rates unchanged this week, investors will closely follow its statements regarding upcoming meetings.
Bitfinex also noted that credit conditions have tightened, particularly in financing related to the artificial intelligence sector. The Philadelphia Semiconductor Index recorded a 17.9% decline over three weeks.
Quarterly earnings from Alphabet, Amazon, Microsoft, and Intel could also influence Bitcoin because of its correlation with major stock market indices.
Meanwhile, the real yield on 10-year US Treasury bonds fell from 2.91% to 2.66% between October 9 and October 23.
Bitfinex warned that this decline does not necessarily benefit BTC when it is driven by investors becoming less willing to take risks. A stabilization in equities, accompanied by a Bitcoin recovery, would support a different market outlook.
