Wintermute: Bitcoin faces a test at the $82,500 level, with AI risks and Federal Reserve policy potentially triggering volatility.

Crypto market maker Wintermute updated its market report today, noting that multiple upcoming events—including the U.S. Federal Reserve’s interest rate decision, midterm elections, and third-quarter earnings reports—could soon break Bitcoin’s current narrow trading range. A breakout above $87,000 would confirm an upward move, while a valid drop below $82,500 could push prices further down to around $70,000. On the macro front, U.S. headline CPI rose to 3.7% from 3.4% in August, with core CPI increasing 0.3% month-over-month, exceeding the market’s 0.2% expectation and stoking concerns about energy price pass-through to core inflation. Wintermute added that the recent rise in U.S. Treasury prices largely reflects capital exiting crowded AI growth stock trades, rather than improved inflation expectations. The market currently expects the Fed to hold rates steady at its October 28 meeting, but a hawkish signal could prematurely reinforce bets on a December rate hike, pushing up Treasury yields and pressuring risk assets. Within the crypto market, funds are flowing into major coins. The report shows Bitcoin’s weekly decline stands at 1.99%, the Nasdaq index is down 5.52%, and altcoins overall have fallen 5.69%. Capital has continued to flow into BTC and ETH while exiting most altcoins, with high-beta and small-cap tokens facing more significant pressure. Wintermute believes major coins currently offer a more attractive risk-reward ratio, and a broad altcoin rally may need to wait for Bitcoin to strengthen further. The firm also pointed out that current implied volatility is low, and with the Fed decision and midterm elections approaching, the market may be underestimating subsequent volatility risks. The October 28 Fed meeting will be a key near-term catalyst, while earnings from AI-related companies will also influence market sentiment around computing power investment, financing costs, and business models.