Bitcoin tests $80K support as Fed decision looms and whale activity slows

Price Action and Liquidations

Bitcoin (BTC) traded below the $80,000 psychological threshold twice over the weekend, hitting specific lows of $79,200 and $79,300. The decline coincided with $34.63 million in total liquidations over the past 24 hours. Market data indicates that 78% of these liquidations involved long positions, reflecting a significant reduction in leveraged bullish exposure during the price dip.

Over the past three weeks, the market has exhibited a technical trend of lower highs and lower lows. Analysts suggest that if these losses are sustained, price action could be pushed toward a support zone between $75,000 and $77,000. This volatility occurs ahead of a key macroeconomic event: the Federal Reserve is scheduled to announce its interest rate decision on Wednesday, October 28.

Macro Expectations

Traders are largely expecting the central bank to hold its current stance. The FedWatch tool indicates a 90.6% probability that the target rate range will remain at 375-400 basis points. The likelihood of a rate hike is currently assessed at 9.4%. While Bitcoin has previously shown sensitivity to Federal Reserve policy shifts, the market is currently bracing for a pause in the current monetary cycle rather than an immediate change in direction.

On-Chain Divergence

Crypto analyst Darkfost highlighted a divergence between retail and whale investor behavior using on-chain metrics from Binance. The spot average order size metric, which favors large whale orders, has remained active in recent weeks. This metric previously signaled a local market bottom and subsequent price resurgence in mid-August when Bitcoin was trading around $60,000. It also showed high whale participation earlier in the year during bearish trends.

Darkfost noted that this behavior signals a lack of interest in distributing assets at current price levels. Specifically, the 30-day average for whale investor inflows to Binance fell from $5.9 billion in late August to $3.8 billion in recent weeks. In contrast, the 30-day average for retail investor inflows to the exchange has been rising since September.

This divergence suggests that while retail investors are increasing their exposure, large holders are not rushing to sell their holdings. The analyst concluded that whales appear to be holding steady despite the recent price weakness, indicating that the current selling pressure is not driven by large-scale distribution.

Outlook

The market is now watching how this behavioral gap plays out. If retail selling pressure exhausts itself or if bullish sentiment shifts, the previous uptrend could potentially resume from the $75,000 support zone. The coming days will test whether the current support levels can hold against the backdrop of the upcoming Federal Reserve decision and continued liquidation activity.