The Coinbase Bitcoin Premium Index has recorded negative values for 33 consecutive days.
Written by Ma He, Foresight News
On October 26, Bitcoin price once again fell below the $80,000 threshold, hitting an intraday low of $79,390, just $100 away from the $79,220 low recorded on October 24. Ether (ETH) dropped to around $2,300, after sliding to as low as $2,282 earlier. Altcoins posted broad declines amid the overall market correction.
According to data from Coinglass, total crypto contract liquidations across the network reached $98.19 million in the past 12 hours, with $75.339 million of that coming from long position liquidations. The Coinbase Bitcoin Premium Index has logged negative values for 33 consecutive days, with the latest reading at -0.15%! , (MISSING) reflecting persistently weak purchasing power in the U.S. market.
On the U.S. stock market front, as of last Friday's close, the S&P 500 index traded at 7,623.68 points, down 0.52%! on the day; (MISSING) the Nasdaq Composite Index closed at 25,955.34 points, down 0.21%!; (MISSING) the Dow Jones Industrial Average was at 52,215.16 points, down 1.23%!. (MISSING) Heightened volatility in tech stocks over the past weekend served as the key drag on performance. Spot gold prices hovered around $4,000 per ounce, down roughly 4%! from the mid-month high, (MISSING) though still trading within the historical high range. Brent crude was priced at around $110 per barrel, with persistently elevated oil prices amplifying market concerns about sticky inflation.
Spot Bitcoin ETFs See Record Single-Day Net Outflows of Over $600 Million
Spot ETF fund flows have been a direct reflection of the recent price pressure. Since October, U.S. spot Bitcoin ETFs have seen massive swings between net inflows and outflows.
While net inflows exceeded $500 million on both October 19 and 21, the segment saw a single-day net outflow of $635.49 million on October 22, marking the highest net outflow in nearly three months.
In addition to net outflows from spot Bitcoin ETFs, spot Ethereum ETFs have also posted weak performance metrics.
Since September 29 this year, the products even recorded 10 consecutive days of net outflows at one point, and as of recently, they have only posted small net inflows on two trading days.
Lackluster performance from both spot Bitcoin and Ethereum ETFs has weighed on the price performance of the two assets.
Fed Policy Decision to Be Announced This Thursday
Crypto markets typically choose to step back and wait on the sidelines ahead of the official announcement of the Federal Reserve's interest rate decision.
The Federal Reserve is set to announce its interest rate decision in the early morning of October 29.
According to data from prediction market Polymarket, the current market-implied probability of the Fed holding rates steady in October has risen to 94%!, (MISSING) while the probability of a 25 basis point rate hike is only 6%!. (MISSING)
However, the market-implied probability of a rate hike in December has climbed to 77%!, (MISSING) while the probability of holding rates steady is only 21%!. (MISSING)
Oil prices currently remain elevated, with Brent crude hovering near $110 per barrel. This price level is far above where it stood at the start of the year, driven by recurring geopolitical tensions in the Middle East, shipping risks in the Red Sea, and supply disruptions in select oil-producing nations. Rising oil prices directly push up energy costs and inflation expectations, significantly slowing the pace of core inflation pullback.
The latest Reuters survey shows that all surveyed economists expect the Federal Reserve to raise interest rates by 25 basis points at its December meeting, and the rate hike probability priced in by market futures also remains at 76%! to (MISSING) 90%! range (MISSING).
The minutes of the September meeting have made clear that a majority of officials believe another rate hike before the end of the year would be appropriate, and persistently high oil prices have further reinforced this policy path.
For the crypto market, the dual impacts of oil prices and war risks are even more immediate. On one hand, elevated energy prices amplify sticky inflation, reducing the room for the Federal Reserve to end its tightening policy ahead of schedule.
On the other hand, geopolitical uncertainty itself exacerbates global risk aversion, with capital flows tending to reduce positions in high-volatility assets ahead of the policy decision.
Even though the meeting scheduled for October 27-28 will most likely keep interest rates unchanged, market pricing for a December rate hike has already been factored into asset prices. This macro headwind has been repeatedly priced in during Bitcoin's recent break below the $80,000 threshold. As long as oil prices fail to pull back significantly and geopolitical conflicts show no meaningful easing, expectations for a December rate hike will be hard to cool down materially, and risk appetite in the crypto market will struggle to recover quickly.
Outlook for Future Price Action
Changpeng Zhao posted on his X account on October 24, saying, "Bitcoin is dead. This line has been repeated by so many people, so many times. These signals are the perfect time to buy Bitcoin."
Ryan Rasmussen, head of research at Bitwise, said BTC is expected to climb back above $100,000 by the end of the year. His rationale includes sustained institutional demand via ETFs and corporate Bitcoin purchases, the logic of using hard assets to hedge against inflation and debt risks, and improving regulatory clarity. His baseline scenario is contingent on ETF inflows resuming and the macro environment not deteriorating further.
Li Yihua, founder of Liquid Capital, said, "Over the past month, I have repeatedly called for a correction. After Bitcoin broke below the $82,000 and $80,000 support levels, it is now on the verge of falling below $79,000. If that level breaks, the next strong support level will be $75,000, followed by $71,000. Regardless, Liquid Capital maintains that the $57,000 level marked the absolute bottom of this bear market. So the only question is when to buy the dip. There is no clear answer right now, as market conditions are always evolving. But from now on, we can fully focus on identifying buying opportunities at depressed levels."
Arthur Hayes is bearish in the short term. On October 24, he closed all directional trading positions for his fund Maelstrom, taking profit on holdings of ETH, ENA, UNI and other altcoins. He believes the market may need to go through a correction first before it can resume its uptrend. Given the current uncertainty in the macroeconomic and geopolitical landscape, he has decided to step back and wait on the sidelines, re-entering the market only after clear signals that risks have abated.