Key facts
- Bitcoin broke through $86,500 on Tuesday, exceeding a resistance level not seen since early September.
- The total cryptocurrency market capitalization surpassed $3 trillion.
- The Crypto Fear & Greed Index reached 79, indicating "greed" among investors.
- The Nasdaq Composite closed at a record on Monday and touched a fresh intraday high on Tuesday.
- Brent crude and WTI oil prices fell to their lowest levels since September 8.
- The Federal Reserve raised its benchmark interest rate by 25 basis points to 3.75%-4% on September 16.
Bitcoin surged past $86,500 on Tuesday, breaking through a key resistance level and pushing the total cryptocurrency market capitalization above $3 trillion. This rally occurred amid a broader risk-on sentiment in financial markets, with the Nasdaq Composite reaching a fresh intraday record. The Crypto Fear & Greed Index climbed to 79, firmly in "greed" territory, while the Altcoin Season Index stood at 49, indicating that Bitcoin still leads market gains even as altcoins begin to show upward movement.
The Nasdaq Composite's advance was bolstered by chipmakers, which extended a multi-day winning streak. Intel jumped 12% and AMD gained about 10%, crossing a $1 trillion market cap. The Nasdaq closed at a record on Monday, marking its best day since June.
In contrast, oil prices experienced a decline. Brent crude briefly fell below $98 a barrel and West Texas Intermediate (WTI) dropped under $93, their lowest levels since September 8. This slide followed reports that Iran offered to reopen the Strait of Hormuz within days in exchange for eased pressure from Washington. President Donald Trump indicated he expects a deal with Iran "right after the election," referring to the November midterms, while Saudi Arabia is reportedly working to restart its East-West pipeline by the weekend.
The Federal Reserve had previously raised its benchmark interest rate by 25 basis points to 3.75%-4% on September 16, a move driven by hot inflation data, including an acceleration in the Producer Price Index to 5.4% annually in August. Despite the rate hike, the Fed has continued regular purchases of short-term Treasury bills to maintain ample bank reserves, a technical operation that absorbs Treasury supply and supports risk assets, counteracting some of the tightening effect of higher rates. The Fed's bond holdings are currently near $6.7 trillion.
Technical analysis suggests Bitcoin's rally is supported by its daily chart setup, having cleared the zone between $79,673 and $84,144. The cryptocurrency is now testing a trajectory towards $90,000. Bitcoin is also in a "golden cross" pattern, where the 50-day moving average crosses above the 200-day moving average, widely considered a bullish signal. Fibonacci extensions suggest potential targets at $90,763 and $95,074 if bulls maintain control. Support levels are identified at $79,673, $75,436, and $73,617.
Sentiment on prediction markets indicates traders are pricing in a 48% chance of Bitcoin reaching $90,000 this month. Altcoins are also seeing gains, with XRP climbing to $1.57, Solana up 18.2% over the week, and Zcash up 36.7% over seven days. Of the top 100 cryptocurrencies, 97 have shown positive performance in the last seven days.
The Federal Reserve's next policy meeting is scheduled for October 27-28, where markets will assess whether the September hike was a singular response to oil price shocks or the beginning of a series of planned increases.