Wintermute: Bitcoin's $82,500 threshold faces a test, AI risks and Fed policy may trigger volatility
October 20 - Crypto market maker Wintermute today updated its market report stating that with multiple events such as the Federal Reserve interest rate decision, US midterm elections, and Q3 earnings reports approaching, Bitcoin's current narrow trading range may soon be broken. If Bitcoin breaks above $87,000, it may confirm an upward breakout; if it effectively falls below $82,500, the price may further decline to the low $70,000 range.
On the macro front, US headline CPI rose from 3.4% in August to 3.7%, while core CPI increased 0.3% month-over-month, above market expectations of 0.2%, heightening concerns about energy price pass-through to core inflation. Wintermute noted that the recent rise in US Treasuries more reflects capital withdrawal from crowded AI growth stock trades rather than improved inflation expectations. The market currently expects the Fed to keep rates unchanged at its October 28 meeting, but if hawkish signals are released, it could reinforce December rate hike expectations ahead of time, pushing up Treasury yields and weighing on risk assets.
Within the crypto market, there is a trend of capital concentrating into mainstream coins. The report shows that Bitcoin posted a weekly decline of 1.99%, the Nasdaq fell 5.52%, and altcoins overall dropped 5.69%. Capital continued flowing into BTC and ETH while exiting most altcoins, with high-beta and small-cap tokens under more obvious pressure. Wintermute believes that mainstream coins currently offer relatively more attractive risk-reward, and a broad altcoin rally may need to wait for Bitcoin to strengthen further.
Wintermute also noted that current implied volatility is low, and with the Fed decision and midterm elections approaching, the market may be underestimating subsequent volatility risk. The October 28 Fed decision will be a key near-term catalyst, and AI-related corporate earnings performance will also affect the market's assessment of computing power investment, financing costs, and business models.