Key Points
- Bitcoin rebounds after testing the crucial $80,000 support level
- The decline in U.S. Treasury yields alleviated some of the selling pressure.
- ETF Capital outflows and inflation still threaten a continued rebound
Bitcoin rebounded from a night-time decline to around $80,000 on October 15th. With the help of declining U.S. Treasury yields and a weakening U.S. dollar, it briefly rose back above $81,500 during the trading session, allowing the cryptocurrency market to stabilize temporarily.
During the Asian trading session, Bitcoin once touched around $80,226, near its lowest level in nearly a month. Previously, stronger-than-expected U.S. inflation data triggered a new wave of selling. Subsequently, the cryptocurrency managed to recover some of its losses, but the rebound remains fragile against the backdrop of continued uncertainty regarding the Federal Reserve's interest rate prospects.
As the funds of Bitcoin ETF continue to flow out, the market recovery has become more complex, and investors have begun to question whether institutional buying is sufficient to provide support.
Why has Bitcoin rebounded after falling to $80,000?
Bitcoin's latest rebound occurred amid increased volatility in traditional financial markets. Investors initially reacted to stronger inflation data by selling off riskier assets.
In September, the U.S. Consumer Price Index rose 3.7% year-on-year, exceeding the market's expectation of 3.6%. The core inflation rate reached 2.6%, reinforcing market speculation that the Federal Reserve may raise interest rates again.
The initial reaction pushed Bitcoin below $81,000, and tech stocks also tumbled accordingly. However, as the yield on U.S. Treasury bonds began to decline and the dollar weakened, the market environment changed subsequently.
According to Reuters, during the period of global tech stock selling, investors turned to relatively safer assets, and the yield on U.S. government bonds recorded the largest single-day decline in over a year.
The weakening of the US dollar and the decline in yields have helped to alleviate some of the pressures faced by Bitcoin, but neither of these two changes can guarantee that cryptocurrencies will continue to rebound.
Meanwhile, the probability that the Federal Reserve will keep interest rates unchanged at its October meeting has risen to around 75%, indicating that traders have lowered their expectations for short-term tightening policies.
This latest change occurred on Wednesday, after inflation rose unexpectedly and after the Federal Reserve's interest rate expectations were significantly re-priced.
Bitcoin ETF capital outflows continue to suppress the rebound of BTC
Institutional investment demand remains another major obstacle to a stronger rebound.
U.S. spot Bitcoin ETF recorded a net outflow of approximately $261.4 million on October 14, reversing the previous trading day's net inflow of about $175.7 million.
Prior to this, crypto investment products have gone through a difficult period, with cumulative selling pressure exacerbating market concerns regarding inflation and the global financial environment.
Analyst Utkarsh Ahuja warned in comments on the report by Barron that Bitcoin's recent resilience should not be automatically interpreted as evidence of a sustained recovery.
He believes that although institutional investment products have increased the accessibility of Bitcoin, they cannot guarantee a sustained demand during periods of market stress.
Bitcoin Price Forecast: Can BTC Return to $83,000?
The current question is whether Bitcoin can continue its rebound and once again reach the range of $82,000 to $83,000.
Market analysts consider $80,000 to be an important psychological support level, while resistance levels may appear around $83,000 and $84,500.
These levels are merely potential technical reference points and not definite price targets.
Bitcoin's recent decline has also continued its broader downward trend that began in early October when it surpassed the $87,000 high. Recent market liquidations have highlighted how leveraged positions can amplify relatively small price fluctuations.
If it can remain above $83,000, the short-term sentiment may improve, especially if the capital flow of ETF stabilizes and the yield on government bonds remains at a low level.
However, if it falls back below $80,000, Bitcoin could face new selling pressure, especially as inflation expectations rise again.
For now, this rebound indicates that the buying sentiment is still active near an important psychological barrier. However, to confirm a more sustained recovery, we need stronger demand and a more favorable overall market environment.
