Bitcoin rose after the Fed held rates on Wednesday, then dropped below $80,000 during Asian trading as technology shares sold off. Roughly $350 million to $400 million of futures positions were liquidated. Spot bitcoin ETFs added $137 million, nearly all into BlackRock's fund.
Demand from bitcoin's most important buyers came back this week. It has not been enough to hold the price.
Bitcoin was at about $79,850 early Thursday, down about 1.1% from Wednesday afternoon and below the $80,000 level it broke during Asian trading. The day's range ran from about $79,610 to $81,260.
The path
The move did not follow the Federal Reserve. Bitcoin rose after the Fed held its benchmark rate at 3.75% to 4.00% at 2 p.m. Eastern on Wednesday, in a 10-2 vote with Governor Lisa Cook and Cleveland Fed President Beth Hammack favoring a hike. It reached about $81,710 in the 4 p.m. hour and held near $81,000 into the evening.
The drop came later, around 9 p.m. Eastern, when Samsung shares fell in Seoul after its results and U.S. technology futures slid after Alphabet's report. Bitcoin first traded below $80,000 on Binance at about 10:14 p.m. Roughly $350 million to $400 million of crypto futures positions were liquidated over 24 hours, depending on the data provider. One tally of $356 million included $205 million of bets on rising prices.
Other tokens fell too. Ether was near $2,313, down about 1.3% from Wednesday afternoon, and Solana slipped below $100.
The flows
Spot bitcoin ETFs took in about $137 million on Wednesday, their third consecutive day of inflows. BlackRock's iShares Bitcoin Trust accounted for $136 million. Total net assets in the funds reached $104.9 billion.
Ether ETFs went the other way, losing $21.4 million for a third straight day of outflows. BlackRock's ether fund lost $44.8 million, partly offset by inflows into Fidelity's.
The levels
Bitcoin is now about 2.4% below its 50-day moving average of about $81,830 and about 9% below where it started the year. It remains well above its 200-day average near $73,030, and about 5.8% above Strategy's average purchase cost of about $75,446.
That leaves the market caught between steady ETF buying and a price that keeps failing near the 50-day average. Futures pricing at Wednesday's close put the chance of a Fed rate increase in December at about 85%.
Tech trade or base-building?
The tech-trade view: bitcoin is moving with technology stocks, the overnight drop lined up with Samsung and Alphabet rather than any crypto news, and a December hike would pressure all risk assets.
The base-building view: ETF demand has returned for three days in a row, leverage has been cleared out by liquidations, and the price held well above its longer-term average through a hawkish Fed meeting.
What to watch
Coinbase's and Strategy's third-quarter results after Thursday's close, Thursday's ETF flows, the monthly options expiry on Deribit on Friday, Thursday's GDP and PCE data, and whether bitcoin can reclaim its 50-day average.