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Bitcoin remains stuck below $80,000: Fed policy and oil prices to blame

By Telemac

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Bitcoin remains stuck below $80,000: Fed policy and oil prices to blame

Bitcoin continues to face a major resistance barrier around $80,000, a psychological and technical level the leading cryptocurrency has failed to decisively and sustainably break through for several weeks. The culprit: the US Federal Reserve’s decision to hold interest rates steady, combined with surging energy prices reigniting inflation fears. Fed Chair Jerome Powell warned during his final press conference that this external pressure lies beyond the central bank’s control, leaving crypto investors in prolonged uncertainty. The market appears trapped in a fragile equilibrium between structural growing demand and persistent macroeconomic headwinds that show no sign of abating.

Context

Since the start of 2026, Bitcoin has been trading in a narrow range between $74,000 and $80,000. Despite persistent inflows into spot Bitcoin ETFs, which have totaled $58.30 billion in cumulative net inflows since their launch, the market has been unable to break decisively to the upside. Investors are opting for cautious optimism while awaiting major upcoming events: the Federal Open Market Committee (FOMC) meeting and the impending leadership transition at the Fed, where Jerome Powell is set to leave his position as chair after years of navigating unprecedented economic conditions.

On April 29, 2026, BTC was trading around $76,000, down more than 3% from its weekly high near $80,000. This performance reflects profit-taking ahead of the Fed meeting, according to analysts consulted. The market attempted several breaks above $80,000 in preceding weeks, but each one collided with successive rejections that gradually eroded buying conviction and left technical traders questioning the sustainability of any advance.

Patrick Witt, senior White House crypto advisor, stated at the Bitcoin 2026 conference in Las Vegas that a « big announcement » regarding the US Strategic Bitcoin Reserve could come in the coming weeks, though he provided no further details. This potential announcement, if it materializes, could constitute a significant catalyst for the market, according to several observers who see strategic government accumulation as a structural demand driver similar to what gold experienced in prior decades.

Meanwhile, geopolitical tensions in the Middle East, particularly the situation around the Strait of Hormuz, continue to influence risk sentiment across markets. The possibility of disruption to global energy supplies remains an uncertainty factor that investors must factor into their analysis. Combined with hawkish dissent from the Bank of Japan and broader global economic uncertainty, markets find themselves navigating a particularly complex macro backdrop.

The facts

The Federal Reserve announced on April 29, 2026 the maintenance of its target rate in a range of 3.5% to 3.75%, in line with market expectations reflected by the CME FedWatch Tool which assigned 100% probability to this scenario. However, this was the most divided vote since 1992: eight officials supported the status quo, one wanted a rate cut, and three members (Hammack, Kashkari, Logan) objected to maintaining the accommodative bias of the central bank.

This fracture within the monetary policy committee is particularly significant. It reflects deep disagreements over the future conduct of monetary policy in a context where inflation remains elevated and economic prospects stay uncertain. The dots in the Federal Reserve’s projections, which indicate the expected rate for each official, suggest equally marked divergences on the future rate trajectory that could shape policy for years to come.

The inflation metrics followed by the Fed to calibrate its policy show total PCE at 3.5% and core PCE (which excludes volatile energy and food prices) at 3.2% as of March 2026. These levels remain significantly above the 2% target set by the Fed, limiting its room for maneuver and forcing policymakers to maintain a restrictive stance despite growing concerns about economic growth.

Brent crude oil averaged $103 per barrel in March 2026, a high level that notably reflects geopolitical tensions in the Middle East. The US Energy Information Administration (EIA) projects a peak near $115 per barrel in the second quarter of 2026, before a gradual decline below $90 in the fourth quarter of 2026. However, this downward trajectory is not guaranteed and depends on multiple factors including the geopolitical situation, OPEC+ production decisions, and global demand dynamics.

Jerome Powell emphasized during his press conference that it would be inappropriate to suggest that the Fed could « calibrate away » an external energy shock the way it manages a domestic demand cycle. This structural limitation means energy price increases will continue to fuel inflation regardless of monetary policy. The central bank finds itself in a delicate position where its usual levers have reduced efficacy against supply-side inflationary pressures.

The oil market is currently subjected to two simultaneous inflationary channels. The first is the direct channel: rising oil prices translate into increased transportation and production costs that ultimately pass through to consumer prices. The second is the tariff channel: duties imposed on American imports, particularly from China, progressively transmit to consumer goods prices. This two-channel configuration significantly complicates the Fed’s task and explains why traditional monetary policy responses may be inadequate.

Analysis

According to in-depth analysis from Glassnode, one of the leading firms specializing in Bitcoin on-chain analysis, the True Market Mean stands at approximately $78,000. This level corresponds to the historical average of the fair value of Bitcoin calculated across different holder cohorts. The short-term holder cost basis, which represents the average acquisition price of recently purchased bitcoins, is evaluated at around $79,000.

Together, these two levels form a compressed resistance zone between $78,000 and $80,000 where BTC has collided multiple times before retreating. This zone is particularly significant as it represents the equilibrium point between historical supply and demand. Each break attempt was followed by a rejection, progressively building psychological and technical resistance that has become increasingly difficult to overcome without a major catalyst.

The current short-gamma zone sits near $76,000. In this zone, market maker hedging flows from call option selling create a structural bias that amplifies movements in both directions. On a decline, market makers are forced to sell to cover their exposure. On a rise, they must buy. This automatic hedging dynamic keeps the price in a narrow range and complicates any directional move, creating a technical environment where breakouts tend to fail and breakdowns tend to reverse.

A notable element of the current market is the extreme positioning on perpetual contracts. Positioning data indicates that traders are net short at a record level. Net short positioning on perpetuals has reached its most negative level on record, building what analysts describe as considerable squeeze potential. A simple cooling of the inflation narrative, a better-than-expected PCE reading, or favorable macroeconomic news could trigger a sharp upward move as short positions are forced to close, creating a cascade of buying that could overwhelm available sell orders.

Early signs of recovery are nonetheless emerging. Spot selling is easing, suggesting that large Bitcoin holders are no longer under as much pressure to sell. Bitcoin ETF flows are stabilizing, with total net assets standing at $101.23 billion, equivalent to approximately 6.5% of Bitcoin’s market cap. Distribution at current levels is losing momentum, meaning the number of bitcoins sold by short-term holders to realize profits is decreasing, which historically precedes price stabilization and eventual recovery.

The technical environment also shows mixed signals. While Bitcoin has failed to maintain positions above $80,000, it has also avoided breaking below support around $74,000. This volatility compression, visible on tightening Bollinger Bands, suggests an imminent directional move. Historical patterns generally indicate that the longer the compression, the more significant the subsequent move, and current conditions suggest a resolution is drawing closer.

Market reactions

In the hours following the Fed announcement, Bitcoin initially retreated before bouncing weakly. BTC attempted breaks toward $80,000 several times in preceding weeks but consistently failed to hold the level, generating repeated rejections that erode buyer morale. This dynamic of repetitive « fakeouts » can be particularly costly for traders using leverage, as each failed breakout consumes collateral and weakens positioning capacity.

Futures markets now price zero chance of a rate cut by year-end. The CME FedWatch Tool indicates near-zero probabilities of cuts before 2027. Some traders even assign a small probability to a rate hike over the next twelve months, a prospect that would be particularly unfavorable for risk assets, including Bitcoin, which would face a challenging environment of higher borrowing costs and reduced liquidity that typically weighs on speculative assets.

Among alternative cryptocurrencies, Ether edged up 0.3% to $2,299, while XRP, TRON, and Solana slipped 0.3% to 0.8%. Dogecoin bucked the broader weakness with a 1.8% gain, likely benefiting from speculative interest in lower-market-cap assets that often outperform during periods of market consolidation. Ether nevertheless remains in a sluggish trend, with performance below expectations and technical indicators suggesting continued range-bound trading in the near term.

The derivatives market also reflects the prevailing uncertainty. Implied volatility on Bitcoin options recorded a decline while prices remained range-bound, suggesting market participants anticipate an imminent move but remain uncertain about its direction. Put/call ratios remain elevated, indicating traders are hedging rather against a decline than positioning for an upside, reflecting the risk-off sentiment that has characterized crypto markets in recent weeks.

Perspectives

Two opposing scenarios emerge for the coming months, with very different implications for holders and investors.

In the bullish scenario, Brent crude follows EIA projections and gradually declines after the Q2 2026 peak. Headline inflation cools, the Fed’s implied rate cut narrative becomes credible again, and Bitcoin consolidates above $80,000. A sustained break above this threshold would trigger a move toward the short-gamma zone around $82,000, where market makers would be forced to buy to cover their call option exposure. In this scenario, $84,000 could be tested, a level corresponding to the lower edge of the overhead supply cluster. The ETF context, with improving flows and persistent institutional demand, would provide the fuel needed for this upside move. On-chain signals also show recovery in holder behavior, with long-term holders starting to accumulate again after a period of distribution, historically a constructive technical development.

In the bearish scenario, oil remains elevated longer than expected. Bitcoin fails to break its historical average and retreats toward main support between $65,000 and $70,000. This range corresponds to a zone where substantial buy orders are concentrated and where long-term holders have historically tended to accumulate. The $68,000 level, corresponding to minus one standard deviation of the price distribution, constitutes the first structural floor and represents a critical technical level that would signal broader market deterioration if decisively breached.

A break below $68,000 would accelerate distribution and weaken the broader technical base. Disappointed ETF flows, which could reverse if sentiment deteriorates, would then worsen the trend. The leadership change at the Fed, if the new chair adopts a more monetarist line, could also weigh on the market by signaling a more restrictive approach to financial conditions and risk asset support.

Regardless of the scenario, observers agree on one point: triggering a clear directional move requires real demand arriving in the $78,000-$80,000 zone before macroeconomic uncertainty forces another leg lower. As a Glassnode analyst summarized, « the breakout and retest scenarios both hinge on real demand arriving in the $78,000-$80,000 zone before macro uncertainty forces another leg lower, » highlighting the critical importance of institutional accumulation in determining the next major price move.

Potential catalysts for a regime change include de-escalation in the Middle East that would push oil prices lower, a political shift toward less aggressive trade policy, or clearer signs of economic slowdown that would pressure the Fed to ease its stance. Conversely, geopolitical escalation or more persistent-than-expected inflation could prolong the current range and push Bitcoin toward its lower supports, testing the resolve of investors who have weathered previous cycles of consolidation.

Sources

Telemac
Telemachttp://cryptoinfo.ch

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