The Federal Reserve held its target rate range at 3.75% to 4% on October 28, with a 10-2 vote. Federal Reserve Governor Lisa Cook and Cleveland Federal Reserve President Beth Hammack dissented, both favoring an immediate quarter-point rate increase.
Rate-market trackers estimate the probability of a December rate hike between 83% and 88%. The market had priced in a rate hold before the meeting announcement.
Fed Signals Measured Approach Amid Economic Crosscurrents
The Federal Reserve committee described growth as strong and reaffirmed its commitment to returning inflation to 2%. Chair Kevin Warsh acknowledged that credit conditions had tightened, credit spreads had widened, and higher rates were affecting technology investment, including artificial intelligence development. He declined to characterize overall financial conditions as tight, suggesting the Fed may tolerate additional market strain before adjusting policy.
The 10-year Treasury yield sat near 5.04% on the decision date, with the two-year yield near 4.78%. The University of Michigan's final October sentiment index registered at 48.
Bitcoin's Technical Levels Under Pressure
Bitcoin dipped to $80,500 following the announcement and recovered above $81,000. According to Glassnode analysis, this price sits near the approximately $81,500 aggregate cost basis of U.S. spot Bitcoin exchange-traded funds.
Long-term Bitcoin holders control roughly 4 million coins acquired between $85,000 and $118,000, representing potential selling pressure as prices approach breakeven levels. About 4.3% of total Bitcoin supply last moved between $84,000 and $85,000.
Bitcoin has repeatedly encountered resistance in the $84,000 to $85,000 range. Following the October 24 decline, approximately $3.4 million in Binance bids remained at $80,000, while the largest cluster of bids sat between $78,000 and $79,000 with roughly $42 million, up from approximately $24 million in mid-October.
Market Dynamics Show Reluctant Sellers and Hesitant Buyers
On-chain data shows entity-adjusted profit-taking running near $260 million daily in late October, roughly half its September peak. The 30-day realized volatility sits near 25%, below approximately 95% of readings since 2015.
Spot Bitcoin exchange-traded fund net flows were negative $487.2 million between October 22 and October 27, according to Farside Investors data.
Inflation Data and Economic Events on Horizon
Upcoming economic releases including the personal consumption expenditures index, gross domestic product figures, and November payroll data will influence rate expectations ahead of the December 8-9 Federal Reserve meeting. A resolution to the Strait of Hormuz situation could potentially ease oil prices and inflation expectations.
Tokenized assets show shifting capital allocation, with tokenized stocks up approximately 12% over the past month while tokenized Treasuries declined despite the 10-year Treasury yield near 5%.
