Bitcoin (CRYPTO: BTC) faces a critical week with investors being cautious ahead of Wednesday’s Federal Reserve decision.
BTC Struggles To Hold $80,000
Bitcoin dropped 2.43% for its third consecutive weekly decline, losing the critical $82,500 support level and testing $80,000 for the third time in three weeks.
It briefly rallied to $84,900 on Wednesday before falling to almost $79,100 on Saturday.
U.S. spot Bitcoin ETFs recorded $636 million in outflows on Thursday, their largest daily withdrawal since June, as the Nasdaq declined 2.6%.
Brent crude surged 5.66% to $116.72, intensifying inflation concerns and complicating the Fed’s interest rate outlook.
Wintermute analysis on Tuesday warned that Bitcoin must reclaim the $82,000–$82,500 range to restore bullish momentum.
A sustained break below $80,000 could expose $76,000, with further losses potentially pushing Bitcoin into the low $70,000s.
Will Fed Decision Trigger Another Selloff?
Markets are pricing a rough 86% probability of the Fed holding interest rates steady at Wednesday’s meeting. Expectations of another rate hike in December make Fed Chair Kevin Warsh’s commentary particularly important:
- Hawkish statements signaling further tightening could lift Treasury yields and pressure Bitcoin below $80,000.
- A more flexible stance on December could support a recovery toward $82,500.
Thursday’s September Personal Consumption Expenditures (PCE) inflation report presents another risk.
A dovish Fed decision followed by hotter-than-expected inflation could trigger renewed selling across technology stocks and cryptocurrencies.
Why Could An AI Stock Selloff Drag BTC Lower?
Bitcoin’s growing correlation with technology stocks increases its vulnerability to an equity selloff.
With 85% of leveraged ETF assets concentrated in tech, AI and semiconductor stocks, a sharp correction could trigger forced selling across risk assets, including Bitcoin.
The analysis also warned that macroeconomic conditions and institutional flows increasingly outweigh Bitcoin’s traditional four-year cycle.
“We are not bearish, but we stay cautious until the FOMC is behind us and BTC reclaims $82,500,” the analysis stated.
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