Bitcoin dropped below $82,000 on Tuesday, as rising oil prices and ongoing geopolitical tensions dampened investor sentiment. The world's largest cryptocurrency was trading at around $81,793.2 by 02:58 ET (06:58 GMT), marking a roughly 1% decline for the day. Earlier in the week, Bitcoin had climbed above $83,000 but failed to maintain those gains, continuing its struggle to recover after falling from levels above $85,000 earlier this month.
Oil prices remained elevated, with futures reaching as high as $111.05 a barrel, a fresh five-month high. Attacks on Saudi Arabian infrastructure and ongoing disruptions in the Middle East have kept energy markets tense, raising concerns that higher fuel costs could sustain inflationary pressures. This complicates the Federal Reserve's efforts to bring inflation back to its 2% target, potentially limiting its ability to ease monetary policy.
Investors are now focused on the Fed's October 27-28 meeting for clues on the future path of interest rates. Markets have scaled back expectations of an imminent rate increase, with FedWatch data showing an 18% probability of a hike at the upcoming meeting. Traders are pricing in a 75% chance of a rate increase in December. Recent U.S. inflation data reinforced these concerns, with consumer prices rising 3.7% year-on-year in September and core inflation increasing 2.6%, both slightly above economists' expectations.
Most altcoins also fell on Tuesday, extending losses amid a cautious mood. Ethereum dropped 1.3% to $2,398.92, while Binance Coin fell 1% to $1.3011. Solana eased 1%, and XRP declined 1.4%. Among meme tokens, Dogecoin fell 0.5%.