Decoding Bitcoin’s midterm setup amid hawkish Fed risks

Bitcoin's midterm outlook is facing uncertainty due to the Federal Reserve and PCE data, while on-chain information suggests a potential low near $80k.

The next 48 hours are critical for Bitcoin's November trajectory. The FOMC meeting scheduled for October 28 could significantly alter BTC momentum for the remainder of Q4. Following BTC.D dropping below 60% and Bitcoin falling below its key resistance at $80k, a retest of $75k is becoming increasingly probable, which might increase downward pressure on crypto entering November.

Vugar Usi, CEO of MEXC, stated regarding the Fed meeting, "The Federal Reserve is expected to keep interest rates unchanged at its October meeting as it balances rising inflation with a weakening labor market." He added that policymakers might prefer to wait, given that September payrolls rose by only 29,000.

For Bitcoin, the central concern is whether the Fed signals further rate increases "ahead." US inflation rose by 0.3 percentage points to 3.7% in September, marking its highest increase since May 2026. This persistent inflation, linked to higher energy costs, could impede the Fed's capacity to cut rates, potentially pushing Bitcoin into a bearish phase if officials suggest rates could stay elevated longer.

However, the market might have already accounted for this hawkish Fed stance. Even if the Fed remains cautious, BTC could still experience a surge. Determining potential signs that the market might be bottoming is therefore vital for assessing Bitcoin's [BTC] performance heading into November.

Key data indicates BTC could maintain above $80k even if the Fed adopts a hawkish position or leaves open the possibility of another rate hike in December. Vugar Usi emphasized the importance of demand in sustaining Bitcoin's recovery. BTC previously climbed from $75k to $81k after the September 16 Fed meeting, contrary to market expectations.

A recovery in spot demand is crucial, as around $774 million exited U.S. spot Bitcoin ETFs between October 22–23. If buyers absorb selling pressure, BTC could defend $80k. On-chain data supports this view; recent BTC holders have moved out of the heavy sell zone, and the short-term holder supply in late September was nearly all in profit, cooling to about 70%, potentially easing profit-taking.

Furthermore, the Coinbase Bitcoin Premium has reached a new low since June 2026. When the market was at these levels previously, BTC bottomed the next day and subsequently rose 50%. On-chain indicators also suggest seller fatigue, contributing to the narrative of a rally following the midterm elections.

These signs suggest Bitcoin is holding at $80k despite Fed news and the PCE report. If BTC can defend this level, a post-election rally might gain momentum. A hawkish Fed could push Bitcoin toward $75k, whereas holding $80k could support a rebound.