Bitcoin: The market plunges again despite $1 billion injected into ETFs

Bitcoin briefly approached $84,800 on Wednesday before erasing almost all of its progress. BTC was trading around $82,800 on Thursday, just above the closely watched $82,500 support. The reversal does not only come from concerns around artificial intelligence. The war with Iran is keeping oil high, while US inflation remains at 3.7% and the Fed meets on October 28. At the same time, Bitcoin ETFs have just attracted more than a billion dollars in three sessions.

Bitcoin fails again before $85,000

Wednesday’s movement started off pretty well. Bitcoin rose above $84,000 and then moved closer to $85,000. This area has blocked the market for several sessions. A few hours later, bitcoin was back around $82,800. The situation is reminiscent of that seen earlier in October, when oil and tensions with Iran had already brought Bitcoin below $83,000. This time again, $82,500 returns as an important level.

CoinDesk reports that several analysts monitor this threshold as the main short-term support. A lasting break would further weaken the current structure. Conversely, the return above $84,000 and then $85,000 would give buyers a little more room.

For the moment, neither side has really gained the upper hand. Bitcoin remains stuck in a relatively narrow band after falling below $81,000 over the weekend. The rebound has therefore recovered part of the lost ground, but not enough to erase the fragility accumulated since the start of the month.

Other risky assets tell a similar story. Asian stocks fell sharply on Thursday. The MSCI Asia-Pacific excluding Japan lost around 1.8%, while several Asian technology indices fell between 2% and more than 4%. Bitcoin therefore does not evolve alone.

AI spending continues to strain Wall Street

Meta and Tesla were eagerly awaited on Wednesday evening. The two companies published different results, but they did not completely reassure investors on a question that has become central: how much will still have to be spent to build the infrastructures necessary for artificial intelligence?

Meta reported $64.6 billion in revenue in the third quarter, up 26% year-over-year. Growth remains strong. The expenses too. The group now plans between $135 and $145 billion in investment spending in 2026. Data centers, chips, servers and infrastructure intended for Muse and other AI products absorb a growing part of the group’s resources.

Meta’s free cash flow even became negative in the third quarter, at around -$2.12 billion. Markets are therefore looking to know when these investments will begin to produce sufficient income. This nervousness is beyond Meta. For several weeks, chip manufacturers, cloud companies and companies linked to data centers have been experiencing particularly volatile sessions.

The subject directly affects Bitcoin because BTC still largely behaves like a risky asset when the Nasdaq stalls. Arthur Hayes, however, considers that a possible bursting of the AI ​​bubble could then benefit Bitcoin, particularly if the authorities respond with more liquidity.

Not yet. In the short term, concerns about AI tend to reduce risk-taking. Tesla sent a different signal by limiting its spending. Its third-quarter investments reached around $4.7 billion, far from the expected $7.5 billion. The manufacturer also reduced its annual target to around 20 billion, compared to more than 25 billion previously. It wasn’t enough to make the nervousness go away.

Iran and Oil Remain a Direct Problem for Bitcoin

This is the other half of the file. Tensions in the Middle East have again become significant enough to keep Brent around or above $110 per barrel this week.

The Strait of Hormuz remains particularly monitored. It is one of the most important oil and gas crossings in the world. On Thursday, tensions increased further in the Gulf. Iran’s Revolutionary Guard has reported several incidents involving ships and warned that further US escalation could prompt a broader response.

At the same time, attacks in the region have revived concerns about energy supplies. The mechanism for Bitcoin is quite simple. Expensive oil fuels inflation expectations. Higher inflation may push the Fed to hold rates longer, or even consider further tightening. Bond yields then remain attractive and riskier assets lose part of their advantage.

This channel has already been seen several times since September. Again on Tuesday, markets reacted almost immediately to contradictory information regarding a possible diplomatic breakthrough with Iran. WTI fell from more than $101 to around $95.50 after early news of a proposed compromise. The Nasdaq went from falling close to 1% to rising 0.6%. Bitcoin has returned to $83,000.

Then a denial came. Oil rose towards $97.60 and Bitcoin lost part of the movement, around $82,300. A few dollars of change in oil was enough to move stocks and Bitcoin simultaneously.

The Fed inherits inflation that is still too high

The energy situation comes at a bad time for the American central bank. September CPI inflation rose 0.6% month-on-month and 3.7% year-over-year, according to the Bureau of Labor Statistics. Energy explains a lot of movement. Gasoline prices jumped 9.1% in September, while the overall energy index rose 5.2%. Over twelve months, energy shows an increase of 20.4%.

Bitcoin had already fallen after the publication of these figures. The problem now is that oil remains high several days after the report. The hoped-for reduction in energy pressures is therefore not really happening.

The Fed is due to make its next monetary policy decision on October 28. This meeting becomes more complicated as oil and inflation rise. Markets are not necessarily expecting an immediate rate hike. But the debate is more about how long the Fed should maintain a restrictive policy.

The Federal Reserve’s schedule confirms a meeting devoted to monetary policy on October 27-28, with the decision expected on Wednesday. For Bitcoin, the rate itself will not be the only important element.

Comments on inflation, oil and future decisions in December can cause as much movement as the official announcement. BTC has already shown this year that a change in rate expectations can move several thousand dollars quickly. The Fed therefore arrives in an already very busy market.

ETFs bring $1.08 billion without unlocking Bitcoin

One element contrasts with this very cautious context: institutional investors are starting to buy again via ETFs. US spot Bitcoin funds attracted around $1.08 billion in three sessions. Monday marked the biggest movement. ETFs had seen $526.6 million in net inflows. BlackRock’s IBIT alone had attracted 665.2 million, offsetting the outflows seen at Fidelity and Grayscale.

The return of capital is important after two difficult weeks. Bitcoin ETFs were still coming out of several sessions marked by withdrawals and insufficient demand.

The situation therefore changed quickly. But $1.08 billion has not yet been enough to send Bitcoin sustainably above $85,000. This discrepancy is worth looking at. In the fastest rising phases, ETF inflows are typically accompanied by strong spot demand, seller liquidations, and a favorable macroeconomic environment.

Today, ETFs do some of the work. The rest is still missing. The Nasdaq remains fragile, oil exceeds $100, the war with Iran continues to fuel the geopolitical premium and the Fed arrives in less than a week with inflation at 3.7%.

This is why the return of institutional capital is not yet producing the same effect as in September. Bitcoin nevertheless retains an advantage: buyers have not disappeared. The market is still defending the $82,000 to $82,500 zone despite several external shocks. ETF inflows also show that a portion of investors are using drawdowns to regain exposure.