Crypto
US Fed Week: Has Bitcoin Already Priced In The Rate Hike?
Bitcoin faces a critical Fed decision as rising exchange inflows and profit-taking raise doubts about whether markets have priced in the next move.
BLOCKINSIDERLoadingBitcoin faces a critical Fed decision as rising exchange inflows and profit-taking raise doubts about whether markets have priced in the next move.
Bitcoin (BTC) enters one of the most closely watched macro events of the autumn on fragile footing. The US Federal Open Market Committee (FOMC) announces its rate decision in 24 hours.
Hike fears and heavy profit-taking have kept BTC pinned near $80,000 heading into the meeting. What remains unclear is how much of the Fed’s next move Bitcoin has already absorbed.
The benchmark federal funds rate currently stands at 3.75% to 4.00%. Speculation about hikes in October, November and December had lingered for weeks. Markets now suggest October may pass without a move.
CME FedWatch puts the odds of a hike at just 7.2%. The probability of rates staying unchanged stands at 92.8%.
That marks a notable shift. On October 20, futures still priced roughly 17% odds of a hike.
The timing of a US Treasury announcement adds another twist. The department said it will buy back up to $6 billion in longer-term debt today. Mortgage rates tell a similar story. Freddie Mac’s 30-year average reached 7.40% in mid-October. Higher borrowing costs now pressure risk assets, including crypto.
A hold does not guarantee relief. Earlier this month, futures leaned toward at least one hike by December. Any hawkish signal could revive that bet.
Buybacks can ease supply pressure on the long end of the yield curve. The 10-year yield closed at 5.15% on October 19, with inflation near 3.7%. The Fed’s tone will matter as much as the number.
Glassnode’s exchange net position change shows BTC flows shifting from outflows to inflows. Outflows dominated from September 23 and peaked near 32,000 BTC on October 22. The latest readings show inflows of roughly 6,000 BTC.
Coins must sit on exchanges before they can be sold, so rising inflows are often an indication of selling.
That shift signals accumulation is subsiding, while distribution and selling are overtaking the market. Even during the outflow streak, price failed to hold its gains. BTC fell from roughly $86,000 on October 5 to $80,000.
Conviction looks thin. September and October saw heavy profit-taking, with investors sitting on gains cashing out before it is too late.
Net realized profit data backs this view. Realized profits spiked to about $2.2 billion around September 22 and $2.3 billion near October 22. Both spikes arrived close to local price tops. Realized profits have stayed largely positive since late August. Holders keep selling into strength.
The contrast with summer is stark. Realized losses dominated July and early August, when BTC traded near $62,000 to $65,000.
This attitude is likely to weigh on BTC, as the price shows.
Bitcoin traded at about $81,411 at the time of writing, hovering just above the $80,000 mark. The recent decline pushed BTC below the exponential moving average (EMA) at $80,796. Bulls need to reclaim that level to revive the recovery.
Overhead resistance sits at $81,208, a level BTC failed to hold. The rally also stalled near $84,112 on October 21.
Daily candles also showed lower highs since early October. Each bounce faded below the previous peak. Wicks below $80,000 have drawn buyers so far. A daily close under that mark exposes $78,363, with $76,388 as the next EMA support.
Momentum favors sellers for now. Bulls must flip $81,208 into support to change that. A break below $75,000 would erase the September breakout. A hawkish surprise from Warsh could accelerate that move. A decisive close above $81,208 would put $84,112 back in play.
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