Bitcoin Slips Under $80K After $404M Long Wipeout as Fed Decision Looms

Bitcoin Loses Its Grip on $80,000 as a Nervous Week Begins

Bitcoin started the final week of October on the back foot. The Bitcoin price slid nearly 2% to about $79,800 during Monday’s Asian session, dipping as low as roughly $79,300 before steadying near $80,400 by the European morning, according to CoinDesk.

The weakness spread across the market. Ether dropped close to 3% to just above $2,300, XRP lost about 3% to $1.28, and Solana slipped 2% to sit barely above $100. TRX was the only major token up.

The move matters because Bitcoin lost its $82,500 floor last Thursday, and traders expected $80,000 to hold as the next line. It did not hold for long. Bitcoin is now down about 4% in October, mirroring last year’s 3.9% loss for the month.

A $404 Million Weekend for Leveraged Longs

The slide began on Saturday. CoinGlass data cited by The Block showed roughly $404 million in long positions liquidated in a four-hour window as Bitcoin briefly fell to about $79,280, the heaviest stretch of long liquidations since October 14.

A liquidation is a forced closure of a leveraged bet. When a trader borrows to enlarge a long position and the price falls far enough, the exchange closes the trade automatically to recover the loan. That adds more selling at exactly the wrong moment, which is why a modest dip can turn into a sharp one within minutes.

Over 24 hours, more than 200,000 traders closed $815 million in positions this way, with Binance accounting for $226 million of the four-hour total.

Arthur Hayes added to the mood. The BitMEX co-founder said on X early Saturday that his family office Maelstrom had closed its entire directional book, including 6,400 ETH, telling followers, “I think we gotta go down to go up.”

Oil, Iran and the Return of Inflation Fear

The trigger sat outside crypto. Brent crude hit $117 a barrel on Friday, its highest since March 19, as the standoff between the United States and Iran escalated. The Associated Press reported late Friday that the State Department was reducing staff at embassies in Jordan, Lebanon, Qatar and the UAE.

Expensive oil feeds inflation, and inflation makes central banks reluctant to loosen policy. That chain is why a shock in the Gulf showed up on crypto charts within hours, and why traders moved to sell crypto and cut leverage rather than wait for Wednesday.

By Monday, pressure eased slightly. Qatari mediators arrived in Tehran on Sunday, President Donald Trump said it was “getting to be decision time” on a deal, and Brent slipped back toward $110. Bitcoin steadied with it but did not recover the lost ground.

Why Wednesday’s Fed Decision Carries So Much Weight

The Federal Reserve announces its rate decision on Wednesday, October 28, at 2pm Eastern, with Chair Kevin Warsh speaking half an hour later. The Fed raised rates in September, and CME FedWatch pricing shows roughly 90% odds that it holds the range at 3.75% to 4% this week.

Traders are less concerned with the hold than with the tone. FedWatch shows about an 80% chance of a further hike in December, and Warsh’s language will be read for confirmation.

Jeff Mei, chief operating officer at exchange BTSE, told CoinDesk that “the Fed could very well adopt an aggressive tone, which means higher rates and less liquidity for crypto and stocks.” Higher rates make cash and bonds more attractive, so money tends to drift away from yield-bearing assets like Bitcoin.

Not everyone expects a hawkish turn. Economist Robin Brooks argued on Substack that with the S&P 500 wobbling and AI debt concerns growing, “that just isn’t a setting where the Fed is itching to hike.”

ETF Buyers Turn Cautious After a $1.08 Billion Start

Spot Bitcoin ETFs told the same story in two halves. The funds took in $1.08 billion from Monday to Wednesday last week as Bitcoin pushed toward $85,000, a three-day inflow streak Digitap’s report on the three-day ETF inflow streak.

Then the flows reversed. Thursday brought $635 million of outflows and Friday another $138 million, according to Farside Investors, leaving a net weekly inflow of about $301 million and October still roughly $314 million in the red.

DWF Labs noted that ETF holders have been net sellers in seven of the eight Bitcoin drawdowns of 15% or more since the products launched in January 2024. In its words, “ETF investors aren’t the dip buyers people think they are.”

The Levels Traders Are Watching Into Wednesday

In the short term, the map is clear. CoinDesk’s analysts say Bitcoin needs to climb back above $82,500, the level it lost last Thursday, before the dip can be called a pause. Cointelegraph reports a $73 million wall of bids sitting just above $79,300 on CoinGlass’s liquidation heatmap, with sell orders clustered near $81,000.

Options traders are leaning defensive. The busiest Bitcoin contract on Monday was the October 28 $77,000 put, which expires on Fed day itself.

Further out, analyst Benjamin Cowen of Into the Cryptoverse wrote on X that Bitcoin’s September and early October trips to $87,000 looked like a “fakeout” and said he expects weakness through year-end, citing historical patterns in US midterm election years. If the $87,000 zone, where the 2026 yearly open and the 20-month moving average converge, keeps acting as resistance, the next quarter could be a grind rather than a rally.

Bitcoin Is Trading Like a Macro Asset Again

The week’s lesson is that the same forces that move the Nasdaq and the oil market are setting Bitcoin’s price. Bitcoin fell on Thursday with a tech sell-off, fell again over Middle East headlines, and is likely to take its next cue from Warsh’s press conference and from Microsoft, Alphabet, and Amazon earnings later in the week.

That cuts both ways. A calm Fed, an Iran deal, and strong earnings could lift every risk asset. A hawkish surprise could do the opposite, and with roughly $140 billion in futures open interest still in the system, the leverage that burned longs on Saturday hasn’t gone away. For now, the market is trading the macro calendar as much as the chart, and the calendar is crowded until Thursday.