- Wintermute said bitcoin was falling for a third straight week and testing $80,000 for the third time in three weeks.
- The firm’s analysts said bitcoin must reclaim $82,000 to $82,500 to restart its uptrend, while a loss of support at $76,000 could open the way to $70,000.
- Wintermute expects the Federal Reserve’s October 28 meeting and the October 29 release of the personal consumption expenditures price index to provide clearer direction.
Wintermute said bitcoin was falling for a third consecutive week and testing $80,000 for the third time in three weeks, leaving the cryptocurrency at critical technical levels. The firm’s analysts said reclaiming $82,000 to $82,500 would be necessary to resume the uptrend, while a break below $76,000 could send the price toward $70,000.
Bitcoin remains under pressure after losing the $82,500 level and retesting $80,000. Wintermute analysts linked the crypto market’s movements to technology stocks, flows into spot exchange-traded funds and expectations surrounding the Federal Reserve’s next policy steps.
The analysts said $82,500 had acted as resistance during bitcoin’s rally before becoming support after a breakout. The loss of that support has now turned the level back into resistance.
Bitcoin needs to reclaim the $82,000-to-$82,500 range to restart the uptrend, according to Wintermute. Holding near $80,000 also remains important for preserving the current market structure.
If bitcoin fails to hold $80,000, the next support level would be $76,000, the lower boundary of the range from which the asset previously broke out. Wintermute estimated that losing $76,000 would open the way to $70,000.
Fed decision could set market direction
Wintermute said bitcoin is closely correlated with technology stocks. Its analysts attributed that relationship to two-way ETF flows, with sizable outflows replacing the inflows that had previously supported the price.
Investors reducing their exposure to the technology sector pose an additional risk and could amplify selling in crypto, the analysts said.
The next major catalyst will be the Fed’s October 28 meeting. Markets expect policymakers to hold interest rates steady, shifting attention to the central bank’s statement and comments from Fed Chair Kevin Warsh.
Wintermute said oil prices above $100 per barrel could increase inflation risks and influence expectations for the path of monetary policy.
A signal that the Fed could raise rates in December may put additional pressure on bond yields and push bitcoin toward another test of $80,000, Wintermute estimated. If the Fed gives no clear indication about its December decision, bitcoin could have room to move back toward $82,000, at least until the October 29 release of the personal consumption expenditures price index.
Wintermute remains cautious
Wintermute’s analysts said current conditions did not provide sufficient grounds for a bearish outlook, but they cautioned against assuming the rally would continue automatically.
They said expectations for further higher highs and higher lows based solely on bitcoin’s four-year cycle overlooked risks associated with the debt burden and a potential reduction of positions in the stock market.
The firm expects bitcoin’s direction to become clearer after the Fed meeting and the PCE report. Until then, it views a recovery above $82,500 as necessary to restore bullish momentum, with $76,000 serving as the key support level if prices fall further.
Analytics platforms CryptoQuant and Santiment previously identified signs that they said may indicate bitcoin is approaching a local bottom.
Source: Incrypted
