Bitcoin Dips Below $86,000 Amid Limited Investor Demand

Bitcoin saw a slight decline on Monday, slipping below $86,000 as investor demand remained weak. The cryptocurrency fell 0.5% to $85,430, having earlier tested the $87,000 resistance level during Asian trading. The limited demand from both retail and institutional investors has prevented Bitcoin from sustaining a higher upward momentum since its 13% surge last month, which pushed it above $80,000 for the first time since late January.

Macroeconomic factors are putting pressure on Bitcoin and other risky assets. Lacie Zhang of Bitget Wallet highlighted key risks, including stronger-than-expected CPI or PPI reports, oil-driven inflation, hawkish Federal Reserve guidance, or rising long-term yields. Despite these concerns, Bitcoin ETFs saw a net inflow of $292.6 million in the first two days of October, though this is still significantly lower than late last month's inflows.

The U.S. dollar neared an 18-month high against a basket of currencies, partly due to French fiscal concerns weighing on the euro. The probability of a Federal Reserve rate hike in October has dropped below 20%, which could potentially support Bitcoin's price. Nic Puckrin of Coin Bureau noted that the next key levels to watch are $90,000 and $92,000 if Bitcoin breaks out of its current holding pattern.

The Federal Reserve's next meeting is scheduled for October 27 and 28. The outcome of this meeting could ease pressure on equity and commodity markets, following last month's rate hike to 3.75% to 4.00%.