Bitcoin $80,000 Test After Fed Hold, 3.7% Inflation

Bitcoin traded near $80,100 on Oct. 29, down 1.6% in 24 hours, after the Fed held rates at 3.75%-4.00% and September inflation ran hot.

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What Did the Fed Decide?

The Fed left its overnight lending rate unchanged at 3.75%-4.00%, following a quarter-point increase in September. The committee voted 10-2. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of another quarter-point increase.

The statement described economic activity as "expanding at a strong pace," an upgrade from "solid" in September. It said inflation "remains elevated" and that the committee would wait for more information before acting again. Futures pricing after the meeting put the odds of a December hike at roughly 80% to 87%.

What Did the Inflation Data Show?

September consumer prices rose 3.7% from a year earlier, up from 3.4% in August, according to the Bureau of Labor Statistics. The headline index gained 0.6% on the month. Energy prices rose 5.2%, and gasoline climbed 9.1% on the month and 34.2% over the year. Gasoline accounted for more than half of the monthly increase.

Core prices, which exclude food and energy, rose 0.3% for a second month. The Fed's preferred gauge showed the same direction: headline PCE inflation reached 3.6% from 3.4%, and core PCE rose to 3.1% from 3.0%.

Why Is Bitcoin Falling Despite ETF Inflows?

Bitcoin is falling because a higher path for interest rates raises the opportunity cost of holding a non-yielding asset. The 10-year Treasury yield rose to 5.05% from 4.99% on Oct. 28, while the 2-year yield eased to 4.67% from 4.70%. Higher long-term yields tend to weigh on speculative assets.

Fund demand has not reversed. U.S. spot Bitcoin funds took in $137.33 million on Oct. 28, led by BlackRock's iShares Bitcoin Trust (IBIT) with $136.01 million. That was the third consecutive session of net inflows. Cumulative net inflows stand at about $57.4 billion.

Derivatives positioning added to the move. Roughly $69 million in Bitcoin positions were liquidated over 24 hours, with long positions making up most of the losses.

How Did Broader Markets React?

Equities showed little stress. On Oct. 28 the S&P 500 closed at 7,743.98, up 0.3%. The Nasdaq Composite finished at 26,549.85, also up 0.3%, and the Dow Jones Industrial Average closed at 52,475.10, up 0.2%. Investors had expected a hold, so the decision itself caused little repricing.

The gap between steady equities and a softer Bitcoin reflects the token's sensitivity to liquidity conditions and real yields. Technology earnings and heavy AI capital spending are also drawing attention across risk assets this week.

What Comes Next for Bitcoin and Rates?

The $80,000 level is now the near-term reference point, with resistance around $81,400 and $82,000. Support sits near the daily low of $79,702, and a break lower would open a move toward $76,000.

The December FOMC meeting is the main scheduled catalyst. October inflation data, due before then, will shape whether the committee follows September's increase with another. Persistent energy-driven inflation would favor a further hike. A cooling in gasoline prices would ease pressure on both Treasury yields and crypto.

Outlook

Bitcoin holds near $80,000 as a hawkish Fed hold and 3.7% inflation outweigh steady ETF demand. The coming weeks depend on energy prices, the next inflation print and the pricing of a December rate increase.