Bitcoin’s Fall Below $80, 000: Fed Policy, Binance Shock or Both?
Bitcoin fell below $80, 000 after a major security incident involving Binance, but the timing alone does not show that the incident caused the decline. The Fed’s cautious message, weakness across markets and leveraged trading may also have played a part.
- The Fed held rates at 3.75%-4% in a 10-2 vote on October 28.
- Bitcoin traded near $81, 000 around the decision, then fell below $80, 000 on October 29.
- Binance’s incident may have added stress, but it is not a confirmed price catalyst.
- Liquidations can deepen a decline, but they do not show what set it off.
The Fed held rates, but its message was cautious
On Wednesday, October 28, 2026, the Federal Open Market Committee (FOMC), the group that sets the Federal Reserve’s target interest-rate range, voted 10-2 to keep rates at 3.75%-4%. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, favoring a quarter-point increase.
The Fed’s statement said:
“Inflation remains elevated. The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal.”
Bitcoin moved toward $81, 000 around the decision, then slipped below the $80, 000 level traders were watching on October 29. That timing does not make the rate announcement an obvious trigger. And a rate hold is not automatically a green light for riskier assets. The Fed’s inflation warning and the two calls for a hike showed that policymakers remained concerned.
Other pressures were also in play. Coverage of the sell-off pointed to weakness in technology shares and elevated Treasury yields. A September inflation reading had also revived expectations of a rate increase. These factors can shape risk appetite, or investors’ willingness to hold assets whose prices can swing sharply. But their individual roles in Bitcoin’s drop have not been established. Rate-cut doubts have weighed on crypto markets before.
What is known about the Binance incident
Elliptic estimated that about $6.43 billion in crypto assets were stolen in a security incident involving Binance. Reports described unauthorized transactions signed through compromised systems. That points to a failure in the systems and processes used to authorize transactions, not a break in blockchain cryptography.
The estimates shifted as investigators tracked assets and possible freezes. The Hacker News reported an early estimate of roughly $2.67 billion in frozen stablecoins, plus about $30 million in ETH and ARB. It later cited a total of $2.84 billion frozen. Those figures are not a final accounting, and the available reporting does not explain every difference between updates.
Binance said its investigation found additional points of breach. The incident’s full mechanics, the amount ultimately recoverable and the parties responsible remained unresolved. No evidence provided here establishes how much Bitcoin, if any, was sold because of the incident, or links those sales directly to the drop below $80, 000.
Liquidations can deepen a sell-off
CoinGlass figures cited during the decline put rolling 24-hour crypto liquidations at $1.53 billion, including about $1.29 billion in long positions. A long position generally gains when prices rise. If it uses leverage, meaning borrowed funds or other exposure that magnifies a trade, a sharp fall can force the position to close.
Those forced closures can add to selling pressure. Prices fall, leveraged positions close, and the resulting sales can push prices lower. But a liquidation total does not tell us what triggered the initial decline. These rolling estimates can change, and the reported figures do not establish whether selling was concentrated in derivatives, spot markets or both.
There were also positive flows into spot bitcoin ETFs, funds that trade on exchanges and hold Bitcoin, before the Fed decision. SoSoValue recorded $110.34 million in net inflows on October 26. ForexCrunch reported $176 million on October 27. Those figures cover net flows into the funds on specific days, not all investor activity or the views of the broader market. They do not rule out selling elsewhere.
At around $80, 000, Bitcoin was roughly 37% below its October 2025 record near $126, 000, according to ForexCrunch. That drawdown and a break below a watched price level matter, but neither points to a single cause. The evidence shows several pressures at once, not a tidy verdict.
Key questions about Bitcoin’s drop below $80, 000
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Did the Fed’s rate decision cause Bitcoin to fall?
There is no clear evidence that it did. Bitcoin fell below $80, 000 on October 29, while the Fed’s cautious message on inflation may still have weighed on risk appetite.
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Was the Binance incident responsible?
It may have added stress, but the timing does not prove it caused the decline. No direct link between the incident and Bitcoin selling has been established.
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What do the liquidation figures show?
CoinGlass figures cited at the time showed substantial forced closures, especially of long positions. Liquidations can amplify a drop, but they do not reveal what started it, and the rolling estimates may be revised.
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Did ETF inflows mean investors were broadly bullish?
No. The reported figures show net inflows into spot bitcoin ETFs on October 26 and 27, not the motives or positions of every investor.
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When is the Fed’s next meeting?
The next FOMC meeting is scheduled for December 8-9. Expectations for a rate move can shift as inflation data and financial conditions change.
The Binance incident, liquidations and cautious rate outlook all belong in the picture, along with weakness in other risk assets. But without evidence tying any one of them directly to Bitcoin sales, naming a single cause would claim more certainty than the facts support.
