Bitcoin Falls Below $80,000 Ahead of Fed Decision
Bitcoin fell 0.4% to about $79,700 on Tuesday, slipping below $80,000 as crypto markets lagged an Asian tech rally. Ether lost 0.5%, while the DeFi index fell 1.8%, the steepest drop among CoinDesk’s indexes. South Korea’s Kospi rose 3.1%, but the gains did not lift crypto prices.
Markets are watching the Federal Reserve’s two-day meeting, which began Tuesday. The rate decision is due Wednesday, and CME FedWatch showed roughly a 90% chance of no change. Traders will look for clues on the possibility of another rate increase this year. U.S. spot Bitcoin ETFs recorded $110 million in inflows on Monday, ending two days of outflows.
Crypto futures trading volume rose 18% to $152 billion over 24 hours, while open interest edged up 0.95%. Bitcoin and ether prices fell over the same period as futures open interest increased, suggesting some traders added positions during the dip. However, options markets showed demand for downside protection, and the most-traded Bitcoin options position was a $72,000 put expiring on Dec. 25.
Bearish
The immediate tone is bearish for crypto: Bitcoin slipped below the closely watched $80,000 level, and the market failed to follow a strong Asian tech rally. Weakness across ether and DeFi tokens, alongside options demand for downside protection, suggests traders remain cautious. Rising futures open interest while prices fall can indicate dip buying, but it can also increase liquidation risk if prices decline further. Positive Bitcoin ETF inflows offer a counterweight, though one day of inflows is not enough to establish a sustained trend.
The Federal Reserve decision is the key near-term catalyst. As in past rate announcements, prices could react sharply to the accompanying guidance even if rates remain unchanged; expectations for tighter policy can weigh on risk assets, while a less hawkish signal may support a rebound. In the short term, Bitcoin’s ability to reclaim $80,000 and the Fed’s comments are likely to guide sentiment. Longer term, sustained ETF inflows and a stabilising macro outlook could help support prices, but persistent demand for hedges and ongoing rate uncertainty leave the market vulnerable to volatility. The bearish classification reflects current price action and positioning, not a definitive longer-term trend.