Bitcoin Stabilizes Above $80,000 After Weekend Sell-Off; Fed Rate Decision in Focus

Bitcoin found its footing around $80,400 on Sunday, stabilizing after a volatile weekend sell-off that pushed the cryptocurrency to a one-month low. The market is now bracing for the U.S. Federal Reserve's upcoming monetary policy meeting, which is widely expected to set the tone for risk assets.

Weekend Plunge Triggers Mass Liquidations

The leading cryptocurrency fell to as low as $79,146 on Saturday, its lowest point in over a month, before reclaiming the psychological $80,000 level. As of 10:31 AM ET, Bitcoin traded at $80,352, though it remains on track for its first monthly decline since June.

The sharp price drop was amplified by a cascade of liquidations in the derivatives market. According to data from Coinglass, more than $810 million in cryptocurrency positions were liquidated over the past 24 hours. The vast majority of these were bullish long positions, accounting for approximately $689 million.

Low liquidity, typical during weekends, likely exacerbated the selling pressure, forcing the closure of highly leveraged positions as the price broke below key thresholds. The cryptocurrency also fell below its 50-day moving average, a technical indicator watched by traders, which sits around $81,700. Key support levels now being monitored are near $78,400 and $77,876.

Fed Policy and Macro Headwinds

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Market participants are closely watching the Federal Reserve's upcoming meeting on October 27-28 for cues on the direction of monetary policy. A decision to maintain or raise interest rates could strengthen the U.S. dollar and dampen demand for risk-sensitive assets like Bitcoin. Conversely, a more dovish stance could provide a tailwind for the crypto market.

Complicating the economic outlook are persistent inflation fears, fueled by high energy prices. Brent crude oil has surpassed $117 a barrel amid geopolitical tensions related to Iran, adding to concerns that inflation may remain elevated and influence the Fed's decision-making.

Corporate and Market Developments

The broader altcoin market showed mixed performance on Sunday. Ethereum (ETH) fell 0.49% to $2,331.61, while XRP gained 1.54% to $1.2930. Elsewhere, hardware wallet manufacturer Keystone disclosed a customer data breach involving names, contact details, and shipping addresses, though it stated that private keys and seed phrases were not compromised.

Meanwhile, corporate treasuries holding Bitcoin face a balancing act. According to Fidelity Digital Assets, companies have acquired approximately 136,000 BTC by issuing perpetual preferred stock. However, the ongoing dividend obligations associated with this financing could constrain future Bitcoin purchases. Seamus Rocca, CEO of Xapo Bank, noted a trend of wealthy holders borrowing against their crypto assets for yield rather than selling them, suggesting a long-term holding conviction.