Bitcoin fell back to around $81,000 after higher-than-expected US inflation, which revived the risk of a further rate hike from the Federal Reserve. The simultaneous decline in stocks, copper and bond yields, while gold advances, above all reveals a general flight towards assets deemed safer.
In brief
- Bitcoin is falling towards $81,000, driven by the general decline in risky assets.
- Stocks and copper fall, while gold rises and attracts investors.
- US inflation is reviving fears of a new rate hike by the Fed.
- The decline in bond yields reflects an increased search for safety.
- The threshold of 80,000 dollars becomes decisive for bitcoin, with a risk of falling towards 75,000 dollars.
Bitcoin supports the decline in risky assets
Bitcoin lost more than 2% in 24 hours on October 15, with a temporary drop near $80,250, its lowest level in almost a month. Ether, XRP and solana suffered even sharper declines, confirming the fragility of digital assets when the US monetary outlook tightens.
Several markets sent the same signal of risk aversion:
- Bitcoin moved 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 falling 1.6% the day before;
- The yield on 10-year US Treasuries returned to close to 5.08%;
- Spot gold gained about 1.3%, above $4,150 an ounce.
The decline in copper provides important information. This metal is often considered an indicator of global economic activity, because it is used in construction, electrical networks and industry. Its decline, combined with that of stocks, suggests that investors fear both high rates and slowing growth.
The movement of bitcoin therefore does not look like a correction exclusively linked to the crypto market. It is part of a broader reduction in exposure to assets sensitive to the economy.
Inflation puts a rate hike back on the table
The US consumer price index rose 0.6% in September and 3.7% year-on-year. The market was expecting an annual increase of close to 3.6%. Gasoline prices notably increased by 9.1% in one month, but tensions are not limited to the energy sector.
This acceleration has reinforced fears that the Federal Reserve will maintain its rates at a high level or raise them again. The probability attributed by the markets to an increase from the October meeting increased significantly after the publication of the on-chain data.
High rates penalize bitcoin in two ways. They make bonds and money market investments more attractive, which reduces the relative attractiveness of assets without guaranteed returns. They also increase the cost of credit and limit the liquidity available for speculative investments.
Simon-Peter Massabni, analyst at XS.com, explain :
For cryptos, higher rates can reduce investors’ willingness to take risks and increase the relative attractiveness of interest-bearing instruments.
The initial market reaction pushed the ten-year US bond yield towards 5.3%. Its subsequent decline to around 5.08% does not necessarily reflect a disappearance of the risk of rising rates. Rather, it shows that investors then bought bonds to protect themselves against a worsening economy and falling markets.
This development explains why bitcoin and yields can decline at the same time. An anticipated rise in rates first weighs on risky assets, then the search for safety supports bonds, which lowers their yield.
Gold benefits from the 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 commodities strategy at Saxo Bank, believes that “Falling real yields and strong investment demand are helping gold recover from its post-inflation correction”. However, he warns that its technical prospects remain fragile.
The divergence with bitcoin shows that the status “digital gold” is not enough to protect crypto during all phases of tension. In the short term, BTC remains highly sensitive to liquidity, the dollar and monetary policy expectations.
The $80,000 zone is now the main monitored threshold. A lasting break could pave the way for a return towards $75,000, according to some analysts. Conversely, a stabilization of inflation and a decline in expectations of rate hikes could allow bitcoin to return to the $85,000 to $88,000 zone.
The next data on producer prices, retail sales and employment will therefore be decisive. They will allow us to know whether the September shock represents a temporary surge linked to energy or the start of more persistent inflation, capable of sustainably maintaining pressure on the crypto market.
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