Sluggish stock market could dampen Bitcoin demand, analysts warn $80,000 support level may face a test

On Oct. 20, according to CoinDesk, the cryptocurrency market saw a pullback amid falling Asian stock markets and rising crude oil prices, with Bitcoin dropping approximately 1.1% over 24 hours to around $81,466. In a Monday report, analysts at QCP Capital noted that further weakness in the stock market could dampen demand for Bitcoin, and if a broad deleveraging trend continues across equities, it could spill over into the crypto market and threaten the $80,000 support level.

Bitcoin's price remains above this support level, with U.S. spot Bitcoin ETFs recording a net daily inflow of approximately $527 million on Monday, marking the highest daily inflow in nearly a month. Among them, BlackRock's IBIT saw a net inflow of $665 million, but capital flows were highly concentrated, while Fidelity and Grayscale experienced net outflows. Meanwhile, Ethereum ETFs recorded a net outflow of $103.3 million, extending their consecutive net outflow streak to four days.

In terms of the macroeconomic environment, the U.S. 10-year Treasury yield is nearing 5.13%, and Brent crude is trading around $110 per barrel. Inflation risks combined with geopolitical tensions in the Middle East continue to weigh on markets. Although the Federal Reserve is expected to hold rates steady next week, forecasts indicate a possibility of a 25 basis point rate hike next month.

On the technical side, Bitcoin's weekly chart remains above the 50-week exponential moving average (EMA), and there are no obvious divergences in the Relative Strength Index (RSI), suggesting a higher likelihood of consolidation above the support level in the short term.