Bitcoin rises 0.3% to $81,970 as Fed meeting looms
Key Facts
Bitcoin rose 0.3% to $81,970 by 09:49 Eastern time on October 23, according to a report published by Investing.com and attributed to Reuters. The largest cryptocurrency remained within a trading range of $80,000 to $87,000 formed over the previous month. The limited move came as a broad sell-off in technology stocks weighed on investors’ appetite for riskier assets. The report linked the market’s weakness to middling results from some major Wall Street technology companies and concerns about interest rates and the sustainability of spending on artificial intelligence. It also pointed to investors awaiting results from other companies and meetings of major central banks the following week, adding to their caution.
Bitcoin’s path in the previous session was volatile: it stood at $82,785.8 by 02:13 Eastern time on October 22, after rising overnight to nearly $85,000, according to an Investing.com report. That marked a retreat from the overnight peak, although the price cited in the report was higher than the $81,970 recorded in the following day’s report. The report said selling in AI-linked stocks and rising oil prices weighed on risk-sensitive assets. In the U.S. stock market, the S&P 500 fell 0.5%, the Dow Jones 1.2% and the Nasdaq 0.2% at the October 23 close, according to the Associated Press. By contrast, Brent crude rose 3.1% to $116.72 a barrel, and the 10-year Treasury yield climbed to 4.99% from 4.96% in the previous session.
Investment flows into spot funds painted a more positive picture than price action. Bitcoin exchange-traded funds recorded inflows of $442.7 million in the week ended October 22, according to the report attributed to Reuters. That was the strongest weekly total since late September and ended two consecutive weeks of outflows. This coincided with the currency remaining within its monthly range, despite pressure from technology stocks and rising oil prices. The divergence between fund flows and price performance stands out in the period ahead of the Fed meeting, as investors followed technology company results and monetary policy signals.
Inflation concerns form part of the backdrop to the debate over interest rates. The U.S. all-items consumer price index rose 3.7% in the 12 months ended in September, compared with a 3.4% increase in the period ended in August, according to the Bureau of Labor Statistics. The index excluding food and energy rose 2.6% year over year, while the energy index increased 5.2% in September after rising 2.1% in August, bringing its annual increase to 20.4%. The gasoline index also jumped 9.1% during the month. On monetary policy, the Fed raised its target interest rate range by a quarter percentage point to 3.75%–4.00% on September 16, saying economic activity was expanding at a solid pace and inflation remained elevated.
Markets are now focused on the Federal Open Market Committee meeting on October 27 and 28, with a BTSE official telling CoinDesk that investors are watching how strongly the Fed chair signals the possibility of a December rate hike. The official added that the Fed is unlikely to change interest rates at that week’s meeting. The Associated Press reported that the market expects rates to remain unchanged at the end of the two-day meeting, while expectations of another increase in December persist. The Fed is scheduled to publish the minutes of its October meeting on November 18, then hold its next meeting on December 8 and 9. On October 26, Bitcoin fell nearly 2% to about $79,800 during Asian morning hours as traders cut risk ahead of the Fed meeting, according to CoinDesk.