Bitcoin Under $80K: Key Floor Test Ahead of High-Stakes Fed Week

Bitcoin (BTC) fell below the psychologically critical $80,000 mark for the second time in 48 hours. After dropping to $79,300 on Saturday, October 24, BTC briefly touched $79,400 during early European trading hours before recovering to sit near $80,000, according to CoinGecko data. The weekend sell-off triggered nearly $400 million in long positions within hours.

Traders are now assessing whether the rebound signals a recovery or a temporary bounce ahead of a week packed with central bank decisions, economic releases and major technology earnings.

Bitcoin’s latest pullback comes amid pressure on technology stocks and signs of weakening liquidity in the cryptocurrency market.

AI and technology stocks face renewed selling pressure. Bitcoin continues to trade in tight correlation with major AI and tech stocks, which faced heightened selling pressure heading into late October earnings. 

Stablecoin supply decreases. According to 10x Research, capital flows into the crypto market have weakened.

USDT market cap slipped 0.5% week-over-week to $182.6 billion, while USDC market cap contracted 1.2% to $71.5 billion. Total stablecoin supply contracted by $1.9 billion over the previous week, while net redemptions over 30 days reached $4.8 billion. 10x Research noted their stablecoin minting indicator sits in the 2nd percentile, a reading it characterized as severely bearish. 

The crypto market enters one of the most event-heavy financial weeks of the year, with volatility expected across all asset classes.

The Federal Reserve’s funds rate decision on October 28 dominates the calendar, accompanied by rate announcements from the European Central Bank (ECB) and the Bank of Japan (BOJ).

Markets will also assess US GDP and inflation data, major technology earnings and upcoming cryptocurrency token unlocks.

Escalating Middle East tensions, especially conflict developments involving Iran and Houthi attacks targeting regional infrastructure, continue to keep risk-on assets under pressure.

Bitcoin’s ability to hold above $80,000 remains a key focus for traders. If the upcoming macroeconomic events fail to improve market sentiment, BTC could face further selling pressure, with $75,000 emerging as a potential downside target.

Analyst Benjamin Cowen highlighted Bitcoin’s position relative to its Bull Market Support Band (BMSB), a technical indicator used to assess broader market trends. Cowen noted that, following a second consecutive weekly close below the May high, Bitcoin could move toward the band.

Cowen also pointed out that TOTAL2 and TOTAL3, which track the market capitalization of cryptocurrencies excluding Bitcoin and, in TOTAL3’s case, both Bitcoin and Ether, as well as the S&P 500, Nasdaq and Strategy (MSTR), had already retested their respective support bands.

The Fed’s decision could influence Bitcoin’s near-term direction. If the Fed signals a more dovish approach, Bitcoin could recover. Otherwise, prices may remain volatile, with a possible retest of the $75,000 level. 

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