Bitcoin continues to trade above $77,000 despite what market observers describe as a challenging environment filled with significant downside risks.
Global equity markets experienced notable weakness last week. The Nasdaq Composite fell nearly 3% on Friday, its steepest single-day decline since June, with major tech stocks including Intel and AMD dropping double digits. The index ended October nearly 8% below its October 6 record as concerns grew about whether massive AI spending would generate adequate returns.
The weakness extended internationally. China's CSI 300 index fell 1.4% on Friday and closed October with an 8.5% monthly loss, marking its largest monthly decline in over a decade. The index has now posted 12 consecutive losing weeks with approximately 15% total losses. China's STAR50 technology index declined 5.5% during that session.
Bitcoin declined on Friday, dropping to a low of $76,100 before rebounding by nearly $2,000. The decline was partly attributed to a $6.3 billion hack involving Binance.
Monetary policy has also tightened. While the US Federal Reserve left rates unchanged last week, stronger economic data shifted market expectations toward additional increases. US GDP grew at a 3.4% annualized rate in the third quarter, while headline PCE inflation rose to 3.6% in September from 3.4% in August. Markets moved to price in approximately an 80% probability of a 25-basis-point Fed rate increase in December.
Geopolitical tensions added to the pressure. Multiple reports over the weekend indicated that US President Donald Trump discussed resuming military strikes against Iran with Israeli Prime Minister Netanyahu following the midterm elections.
Bitcoin declined more than 7% for the month of October overall. Despite these headwinds, traders note that trading levels between $77,000 and $78,000 represent resilience given the combination of market pressures, expected rate hikes, and geopolitical uncertainty.
