Bitcoin eyes $86k as October seasonality and technical levels take center stage

Bitcoin is extending its upward momentum into a fourth consecutive week, climbing towards $86,000 on Monday. This rally comes amid a mixed macroeconomic environment, where falling Federal Reserve rate-hike expectations are being countered by elevated Treasury yields. Last week, Bitcoin surged nearly 3.5% after the core PCE inflation gauge and non-farm payrolls data came in softer than expected. The labor market added just 29,000 jobs in September, well below the 90,000 estimate, while the unemployment rate rose to 4.2%. These figures have reduced the likelihood of a Fed rate hike in October to 23%, down from over 70% a week earlier.

While shorter-term Treasury yields have declined with lower Fed-hike expectations, longer-dated yields remain high. The 10-year yield increased by 9.5 basis points last week, hovering above 5.2% after reaching its highest level since 2002 at 5.34%. Elevated yields could dampen demand for riskier assets like Bitcoin. This week, attention will focus on the bond market, particularly the ISM services PMI and the FOMC minutes, which could influence market sentiment.

Technically, Bitcoin is testing a key resistance level at around $87,500, the 2026 yearly open. Historically, October has been a favorable month for Bitcoin, with an average gain of 17% since 2013. However, there have also been three negative Octobers in the past 13 years, with an average decline of 13%. Spot Bitcoin ETF inflows and whale accumulation are providing additional bullish signals. ETFs saw $2.65 billion in net inflows in September, and whale holdings have increased by 75,000 BTC over the past 30 days.

From a technical standpoint, Bitcoin is trading above its 50 and 200-day exponential moving averages, maintaining a constructive medium-term outlook. The price is consolidating between $82,500 and $87,500. A break above $87,500 could push Bitcoin towards $90,000 and eventually $95,000. Conversely, a drop below $82,500 might shift momentum lower, targeting the 50 EMA at $79,200 and the 200 EMA at $75,000. The key question is whether falling Fed rate-hike expectations and sustained ETF demand can outweigh the impact of elevated long-term Treasury yields.