Bitcoin Rebounds Above $82,000 as US Demand Weakens, October Fed Hike Odds Recede

Bitcoin began the third week of October back above $82,000 as expectations for an additional Federal Reserve rate increase eased and signs emerged of weakening demand from US investors.

Cointelegraph reported on Oct. 19 that Bitcoin ended last week’s candle after breaking below a key support zone between $82,500 and $82,800. Crypto trader Rekt Capital wrote on X that the weekly close leaves Bitcoin open to a retest of $82,500 as resistance. If that retest fails, it could fall below $80,000 in the coming weeks.

On-chain analytics platform CryptoQuant cited weakening US investor demand as a downside factor for prices. The Coinbase Premium Index, which measures the price gap between Bitcoin on Coinbase and Binance, fell to -0.141 on Oct. 18, its lowest level since June 30. If the index remains in negative territory, CryptoQuant said, it would signal insufficient demand to absorb selling pressure and could lead to a short-term price correction.

On the macro front, expectations for further Fed tightening have moderated. CME FedWatch data show markets pricing a 75% probability of a single 25-basis-point increase before year-end. Fed Chair Kevin Warsh, speaking in a conversation with International Monetary Fund Managing Director Kristalina Georgieva, avoided outlining a specific policy path, saying he would not prejudge the outcome of upcoming meetings.

Inflation pressures, however, remain intact. The US producer price index for September, released last week, rose 1.7% from the previous month, marking the largest monthly increase since March 2022. The consumer price index also came in at 3.7% from a year earlier, 0.1 percentage point above market expectations. Both readings were attributed largely to a jump in oil prices tied to the Middle East conflict. Market analysis outlet Mosaic Asset Company said worsening inflation pressures raise the chances that the Fed will maintain its tightening stance, weighing on risk assets including cryptocurrencies.

Stocks are rebounding from last week’s decline. South Korea’s Kospi slid as much as 17% last week before rebounding 1.8% on Oct. 19, while S&P 500 futures rose 0.7%. Earnings from major technology companies including SpaceX, Tesla and Meta are due this week, drawing investor attention.