Wintermute: Bitcoin faces a test at the $82,500 threshold, as AI risks and Federal Reserve policies may trigger volatility

Cryptocurrency market maker Wintermute updated its market report today, stating that multiple events such as the Federal Reserve's interest rate decision, the U.S. midterm elections, and third-quarter earnings reports are approaching, and the current narrow trading range of Bitcoin may soon be broken. If Bitcoin breaks above $87,000, it may confirm an upward breakout; if it effectively falls below $82,500, the price could further drop to just above $70,000.

On the macro front, the overall CPI in the U.S. rose from 3.4% in August to 3.7%, with core CPI increasing by 0.3% month-on-month, higher than the market expectation of 0.2%, intensifying concerns about energy prices transmitting to core inflation. Wintermute pointed out that the recent rise in U.S. Treasury yields reflects more of a withdrawal of funds from crowded AI growth stock trades rather than an improvement in inflation expectations. The market currently expects the Federal Reserve to maintain interest rates at its meeting on October 28, but if hawkish signals are released, it may strengthen expectations for a rate hike in December, pushing up U.S. Treasury yields and suppressing risk assets.

Within the cryptocurrency market, there is a trend of funds concentrating on mainstream coins. The report shows that Bitcoin's weekly decline was 1.99%, the Nasdaq index fell by 5.52%, and altcoins overall dropped by 5.69%. Funds continue to flow into BTC and ETH while withdrawing from most altcoins, with high beta and small-cap tokens facing more significant pressure. Wintermute believes that the current risk-reward ratio of mainstream coins is relatively more attractive, and a broad rally in altcoins may need to wait for Bitcoin to strengthen further. Wintermute also noted that the current implied volatility is relatively low, and with the Federal Reserve's decision and midterm elections approaching, the market may be underestimating the subsequent volatility risk. The Federal Reserve's decision on October 28 will be a key catalyst in the near term, and the performance of AI-related companies' earnings reports will also affect the market's judgment on computing power investments, financing costs, and business models.