20h05 ▪ 5 min read ▪ by Luc Jose A.
Summarize this article with:
Bitcoin fell back around $81,000 after US inflation exceeded expectations, reviving the risk of another rate hike by the Federal Reserve. The simultaneous decline in stocks, copper and bond yields, while gold rises, mainly reveals a general flight to assets deemed safer.
In brief
- Bitcoin falls back to $81,000, driven by a general decline in risky assets.
- Stocks and copper fall, while gold rises and attracts investors.
- US inflation revives fears of another Fed rate hike.
- The decline in bond yields reflects increased demand for safety.
- The $80,000 threshold becomes decisive for bitcoin, with risk of retreat to $75,000.
Bitcoin follows the retreat of risky assets
Bitcoin lost more than 2% in 24 hours on October 15, with a temporary dip near $80,250, its lowest level for nearly a month. Ether, XRP, and Solana suffered even steeper declines, confirming the fragility of digital assets when US monetary prospects tighten.
Several markets sent the same risk aversion signal :
- Bitcoin traded around $80,700 to $81,000 ;
- S&P 500 futures fell about 0.3% ;
- Nasdaq and Asian tech stocks came under pressure ;
- Copper lost more than 1%, after a 1.6% drop the day before ;
- The US 10-year Treasury yield dropped back near 5.08% ;
- Spot gold gained about 1.3%, above $4,150 per ounce.
The decline in copper provides important information. This metal is often considered an indicator of global economic activity as it is used in construction, electrical networks, and industry. Its decline, along with stocks, suggests investors fear both high rates and slowing growth.
Bitcoin’s movement therefore does not look like a correction exclusively linked to the crypto market. It fits into a broader reduction in exposure to assets sensitive to the economic environment.
Inflation puts a rate hike back on the table
The US consumer price index rose 0.6% in September and 3.7% year-over-year. The market expected an annual increase close to 3.6%. Gasoline prices notably rose 9.1% in one month, but tensions are not limited to the energy sector.
This acceleration heightened fears that the Federal Reserve will keep rates high or carry out another hike. The probability assigned by markets to a rate hike at the October meeting significantly increased after the release of on-chain data.
High rates penalize bitcoin in two ways. They make bonds and money market investments more attractive, reducing the relative interest of assets without guaranteed returns. They also increase the cost of credit and limit liquidity available for speculative investments.
Simon-Peter Massabni, analyst at XS.com, explains:
For cryptos, higher rates can reduce investors’ willingness to take risks and increase the relative appeal of yield-bearing instruments.
The market’s initial reaction pushed the US 10-year Treasury yield toward 5.3%. Its subsequent decline around 5.08% does not necessarily mean the risk of rate hikes has disappeared. It rather shows that investors bought bonds to protect themselves against economic deterioration and market declines.
This evolution explains why bitcoin and yields can fall simultaneously. Anticipated rate hikes first weigh on risky assets, then the flight to safety supports bonds, which lowers their yields.
Gold benefits from doubt, unlike bitcoin
Gold rose more than 1% on October 15, supported by the decline in the dollar and bond yields. The precious metal thus fulfills its traditional role as a safe haven, while bitcoin continues to behave mainly as a risky asset.
Ole Hansen, head of commodity strategy at Saxo Bank, believes that “the decline in real yields and the strength of investment demand help gold recover from its correction after inflation”. However, he warns that technical outlooks remain fragile.
The divergence with bitcoin shows that the status of “digital gold” is not enough to protect crypto in all tension phases. In the short term, BTC remains highly sensitive to liquidity, the dollar and monetary policy expectations.
The $80,000 zone now constitutes the main threshold monitored. A durable break could open the way to a return toward $75,000, according to some analysts. Conversely, stabilization of inflation and a decline in rate hike expectations could allow bitcoin to regain the $85,000 to $88,000 zone.
The upcoming data on producer prices, retail sales, and employment will therefore be decisive. They will indicate whether the September shock represents a temporary energy-related push or the beginning of more persistent inflation, capable of sustaining pressure on the crypto market.
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Luc Jose A.
Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.