Bitcoin Above $81,000 Ahead of Fed Decision
The price is recovering alongside riskier stocks as the market waits for the Fed decision and new signals for Bitcoin ETFs in the U.S.
Key Takeaways
- Bitcoin climbed back above $81,000 on Monday and was trading around $81,400 after falling below $80,000 earlier this week.
- The rebound came alongside a recovery in broader financial markets, including chip stocks, Nasdaq futures, and the crypto market.
- The market is looking ahead to the Fed's interest rate decision later today, while spot ETFs in the U.S. saw $176 million in inflows on Tuesday.
Bitcoin climbed back above $81,000 (€72,600) on Monday and was trading around $81,400 (€73,000) after falling below $80,000 (€71,700) earlier this week. The broader crypto market also recovered. Ether rose to about $2,490 (€2,230), while memecoins and other altcoins moved higher along with the rally in financial markets.
Fed and Chips Provide Support
The move came alongside a rebound in Asian chip stocks and AI-related stocks. South Korea's Kospi jumped 6.6% after SK Hynix reported a sevenfold increase in profit. Nasdaq-100 futures also rose 0.5%. For crypto traders, that matters because Bitcoin often reacts sharply to broader risk sentiment and to the Federal Reserve's interest rate policy.
The Fed will announce its interest rate decision later today at 18:00 UTC. According to CME's FedWatch tool, the market is pricing in about a 92% chance of no change. Investors are mainly watching Chair Kevin Wash's press conference for clues about the future path of rates. Higher rates often make traditional investments more attractive, while a lower rate can give more room to riskier assets like Bitcoin. The recent Fed debates also show how strongly the coin keeps reacting to rate expectations.
Altcoins and ETF Inflows
Along with Bitcoin, the altcoin market also picked up. The CoinDesk Memecoin Index rose 1.3%, while spot ETFs in the U.S. saw $176 million (€158 million) in inflows on Tuesday, for the second day in a row. That suggests money is flowing back into regulated Bitcoin products, even though the market remains sensitive to macro news.
The derivatives market showed a mixed picture in the meantime. Trading volume in crypto futures rose 7.5% to $163.2 billion (€146 billion) over 24 hours, while open interest increased only 1.3%. That means more trading took place, but without much extra leverage being added. Liquidations climbed to $183.6 million (€165 million).
October Remains Important
Historically, October has often been a strong month for Bitcoin. In 10 of the past 13 years, the coin ended the month in the green, with an average gain of 20%. That does not say anything about this month's outcome, but it does explain why traders are paying extra close attention to the rate decision and the market's reaction to it.
The broader picture outside crypto is also still positive. Alphabet and Microsoft will report earnings later today after the U.S. stock market closes. Together with the Fed decision, that could set the tone for the rest of the week, especially now that Bitcoin is back above $81,000 (€72,600).
