The 80,000 mark has been temporarily maintained. What should we pay attention to next?

In the past week, Bitcoin experienced a series of intense macroeconomic shocks, causing its price to fluctuate significantly.

On October 14, the U.S. Bureau of Labor Statistics released September's CPI data, which exceeded expectations across the board. What alarmed the market even more was the spread of inflation. In addition to gasoline prices rising 9.1% month-on-month, housing costs also rose 0.4% month-on-month, the fastest pace in five months. Prices for entertainment, used cars, education, airfares, healthcare, and clothing all increased.

This data points to a less optimistic sign: energy prices are being transmitted to other sectors through transportation costs, and core inflation is stickier than the market expected.

Before the data was released, the market priced in a Fed rate hike in October at around 20%.

However, after the data was released, CME FedWatch showed that the probability of an interest rate hike briefly surged to around 50%, before falling back to 43.7%. As of yesterday, this probability had further declined to 27.7%.

The anticipated sharp fluctuations reflect the divisions within the Federal Reserve. The New York Fed president believes another rate hike this year is appropriate, while the San Francisco Fed president suggests the Fed may need to raise rates further, but hints that action in October is unnecessary.

Following the release of macroeconomic data, Bitcoin briefly fell to around $81,000 on October 14, approaching the lower end of its recent trading range, and even briefly dipped below the $80,000 mark last night.

Based on on-chain data, this correction has not yet turned into widespread panic. Glassnode's latest report shows that the realized losses of long-term holders have decreased by about 85% from the peak on August 12.

Glassnode considers the $80,000-$81,500 range a key support level formed by on-chain cost metrics and spot buying. The average cost for US spot Bitcoin ETF holders is approximately $81,500. Bitcoin briefly dipped below this level on October 8th and 13th but recovered by the close.

However, the risks below are also concentrated, with a large number of long liquidation clusters gathered below $80,000, and another dense liquidation zone around $75,000.

In contrast, while short liquidation above $85,000 has increased over the past week, the long liquidation zone below looks more lucrative.

The resistance above comes from the cost range of funds that entered the market over the past two years. The average cost for investors holding for 6 to 12 months is about $88,000, and the average cost for investors holding for 1 to 2 years is about $100,000.

In addition, ETF fund flows also reflect market sentiment. As of yesterday, ETFs were still in a net outflow state this week, and we need to wait for the final data after the market closes this week.

In the short term, the $80,000 level is crucial for determining the direction. If this area holds, the price may move towards $85,000; if it falls, $78,000 will be the next reference point, but the chain reaction of long liquidation could amplify the decline.

In the short to medium term, the Fed’s interest rate decision on October 28 and the expected path of interest rate hikes in December will remain the dominant variables.

Of course, the market is now full of doubts about US stocks, especially the recent rapid pullback in the semiconductor market, which caught many people off guard.

With the midterm elections approaching, the market will likely find a balance point until the results are in. Until then, a wait-and-see approach may be the best strategy.

Source:Global Cybersecurity Alliance (GCSA)
Website:www.gcsa.org