Bitcoin below $83,000, oil starts to rise again

Bitcoin fell to around $81,200 on October 8, following a low near $80,940, its lowest level in nearly three weeks. The rise in oil and American rates is increasing the pressure, while tensions around Iran are rekindling inflationary fears.

Bitcoin price approaches $80,000

Bitcoin lost around 2.7% on the session, after moving as high as $83,560 over the past 24 hours. It has now erased its gains from the beginning of October and has lost more than 6% since its peak near $86,600 reached on Tuesday.

The decline affects the entire crypto market. Ether is falling more than 5% towards $2,430, while XRP is losing almost 6% around $1.35. Leveraged positions amplified the movement.

Multiple data summarize the session:

• Bitcoin is trading around $81,200 after briefly approaching $80,940;
• The threshold of $83,000, considered an important support, has been broken;
• Around $550 million in leveraged crypto positions were liquidated during the first downturn;
• Brent exceeds $104 per barrel, up more than 4%;
• The US ten-year yield is hovering around 5.3%, near its highest since 2002.

FxPro believed that a break of $83,000 could open a fairly quick path to $80,000. This scenario has largely materialized, but the temporary crossing of a level does not yet allow us to conclude that there is a new lasting bearish phase.

Oil amplifies inflation concerns

Brent crude rose to around $104.75 a barrel, while U.S. WTI oil rose above $92. Both benchmarks reached their highest levels in more than a week.

This increase is based on several factors according to on-chain analysis. Attacks on ships in the Persian Gulf and near the Strait of Hormuz have heightened fears over supplies. Only seven ships carrying raw materials crossed the strait on October 6, their lowest number since July 23.

Oil flows through this route fell by 27%, to around 10.1 million barrels per day. The strait remains strategic since around a fifth of the world’s oil and liquefied natural gas usually transits there.

Press information indicate also that the White House would have asked the Pentagon to prepare options for strikes against Iranian targets. This possible request does not mean that an intervention has been decided. It is nevertheless sufficient to increase the risk premium integrated into the price of oil.

The approach of Hurricane Isaias also led several producers, including Shell and Chevron, to suspend part of their operations in the Gulf of Mexico. More than 25% of oil production in this area would have been temporarily interrupted.

High rates weigh on the price of bitcoin

The rise in oil fuels inflation expectations. Investors fear that persistently expensive energy will prevent the Federal Reserve from easing its monetary policy, or even force it to raise rates further.

The yield on ten-year US bonds thus rose to almost 5.3%. High rates make bond investments more attractive and increase the cost of financing. They generally reduce the appetite for risky assets, including cryptos.

Equity markets are under the same pressure. The S&P 500 and the Nasdaq fell after their recent record highs, while technology stocks particularly suffered. The decline in bitcoin is therefore not solely the result of a factor specific to the crypto market.

Demand was already fragile before this new tension. Since September 22, open interest in bitcoin futures has decreased by approximately 10%, from $28.8 billion to $26 billion. This contraction signals a lesser desire among traders to increase their exposure.

The 80,000 dollars becomes the next test

The $80,000 level now constitutes the main psychological support. A quick reaction from buyers could bring bitcoin back towards $82,800 and then $83,000. A sustained recovery above this area would ease immediate pressure.

Conversely, several closes below $80,000 would reinforce the risk of a return towards $77,000, another technical zone monitored since the bullish breakout in September. This is a market scenario, not a certain forecast.

The evolution of oil will remain decisive. A fall in Brent below $100 would reduce some of the pressure on rates and risky assets. New maritime attacks or an American military decision could, on the contrary, prolong volatility.

Bitcoin ETF flows, bond yields and upcoming Federal Reserve statements will help gauge the strength of support. The Iranian conflict accelerated the correction, but weak demand and sell-offs had already set the stage.