Bitcoin Weekly Forecast: Why are a Binance security breach and hawkish Fed driving BTC lower?

• Selling pressure leaves Bitcoin on course for a fourth consecutive weekly decline, with prices below $78,000 on Friday after losing over 3% this week.
• Risk aversion and large-scale liquidation of long positions intensify as markets contend with a hawkish Fed outlook and a security breach at Binance.
• With net inflows of $440.74 million through Thursday, US-listed spot ETFs look set to extend their inflow run to two weeks.

Bearish sentiment continues to grip Bitcoin (BTC), leaving it more than 3% lower this week and on course for a fourth consecutive weekly decline. The world's largest cryptocurrency by market capitalisation faces pressure from the Federal Reserve's (Fed) hawkish outlook at its October meeting and a reported $6.3 billion hack at Binance. Together, these developments are stoking risk aversion and prompting substantial liquidations. 

Spot Bitcoin Exchange Traded Funds (ETFs) offer a contrast to the continuing correction: net inflows reached $440.74 million through Thursday, putting them on course for a second straight week of inflows. Even so, weakness across the wider market leaves the Crypto King vulnerable to a sharper correction.

Could BTC’s October losses signal a weaker November?

The market's “Uptober” narrative is giving way to a “Rektober” month as Bitcoin heads towards a negative October close. On Friday, the Crypto King is trading below $78,000, having touched $76,500 in the early Asian session. 

October losses for the largest cryptocurrency stand at 5.83%, according to the Coinglass BTC monthly returns chart below. Historically, a negative October close for BTC has been followed by double-digit November losses in 3 out of 5 instances. The pattern points to the possibility of further declines next month.

Liquidity in cryptocurrency markets could come under pressure if escalating Middle East tensions tighten global oil supplies, Simon-Peter Massabni, Head of Business Development at XS.com, told FXStreet in an exclusive interview. He said energy market shocks could deepen concerns about monetary tightening by the Fed, potentially restricting liquidity and reducing the scope for a sustained recovery.

With geopolitical uncertainty and fragile investor confidence persisting ahead of November, Massabni expects Bitcoin to trade within a $70,000 to $80,000 range.

A sustainable return to the broader uptrend is not yet supported by clear signals, he added. Recovery attempts could consequently prove brief, as limited confidence in a wider market rebound is likely to encourage investors to book profits quickly.

How has the Binance security breach fuelled liquidations?

Late Thursday brought a major security breach at Binance, the largest centralised cryptocurrency exchange. 

In a post on X, Binance reported: “The estimated total impact sits at around $6.3 billion. We have worked with blockchain partners to freeze affected assets, with $3 billion frozen on-chain so far. Binance will cover all losses from the Secure Asset Fund for Users (SAFU) fund and the company’s funds. User funds are safe,” 

According to the company's preliminary investigation, a DevOps engineer's laptop may have been compromised. This could have enabled an attacker to enter a service container and submit unauthorised withdrawal transactions.

A wave of crypto market liquidations followed the incident. The CoinGlass chart below puts total liquidations over the past 24 hours at $1.53 billion, involving 237,149 traders.

At $11.09 million, the biggest liquidation order occurred on Binance’s BTCUSDT. The scale of forced position closures underscores elevated market stress and is compounding the downward pressure on BTC this week.

Why is the Fed's hawkish outlook restraining BTC?

Risk assets, including Bitcoin, are also under pressure from this week's economic releases. Following its two-day October policy meeting, the Fed left interest rates unchanged at 3.75%-4.00% on Wednesday, though the decision was not unanimous. Lisa Cook and Beth Hammack were the two officials seeking a 25-basis-point (bps) increase. Chair Kevin Warsh said incoming information would guide the central bank's assessment of whether additional action was necessary.

At his press conference, Warsh said officials had “made clear our readiness to act as circumstances require, and we have shown our willingness to act.”

He added: “It’s our responsibility to get inflation down (...) That’s the reason the FOMC’s discussion over the last couple of days focused mainly on the price stability side of our remit,”

Although an unchanged rate decision was already priced in, the inflation concerns and hawkish tone of the forward guidance are reinforcing market caution and putting pressure on risk assets such as cryptocurrencies. 

Thursday's US economic releases reinforced that backdrop, signalling resilient growth and stubborn price pressures. The figures strengthened expectations of an imminent Fed rate increase in December.

US growth picked up to an annualised 3.4% in the preliminary third-quarter Gross Domestic Product (GDP) estimate, compared with 2.2% in the preceding quarter and a consensus forecast of 3.2%. Separately, the US Commerce Department said the Personal Consumption Expenditures (PCE) Price Index increased 0.5% in September and 3.6% year on year. Excluding volatile food and energy prices, the core measure rose 0.3% month on month and 3.1% year on year.

Alongside elevated US bond yields, these figures are adding to inflation concerns and supporting expectations of further Fed tightening, which continues to constrain risk assets such as BTC.

Why have Middle East peace hopes offered BTC little relief? 

Bitcoin remains under bearish pressure despite a weaker US Dollar (USD). Renewed optimism about a diplomatic resolution to the Middle East conflict has weighed on the safe-haven currency, but the Greenback's decline has provided little relief to BTC.

The Guardian reported on Thursday that US Vice President JD Vance had written directly to Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, seeking to revive peace talks. 

A fresh draft proposal to end the war involving the US and Israel was also presented to Iran by Qatar. Investors nevertheless remain cautious as hostilities escalate between Saudi Arabia and the Iran-backed Houthi group in Yemen. Threats by the US and Israel to resume attacks after the US midterm elections have further sustained geopolitical risks. Separately, Iran's navy said on Thursday that four oil tankers had hit sea mines in the Strait of Hormuz, intensifying supply disruption concerns and lending support to oil prices.

Uncertainty remains high against this backdrop. Worries about rising oil prices continue to dampen investor sentiment, leaving little respite for the Crypto King.

Can fresh ETF inflows offer grounds for optimism?

A modest revival in institutional demand for Bitcoin is beginning to emerge. According to SoSoValue, spot ETFs are heading for a second consecutive week of inflows, with net outflows of $440.74 million through Thursday following last week's positive flows of $304.73 million. Continued and stronger inflows on Friday could soften BTC's decline and help a recovery take hold.

Corporate buying patterns are also shifting. In a Monday post on X, Lookonchain said Strategy had made no BTC purchases last week, whereas Strive had acquired 6,182 BTC. After several weeks of purchases, Strategy's pause represents a change in institutional accumulation, even as Strive steps up buying. Continued accumulation by Strive could absorb some selling pressure and lend support to BTC.

Bitcoin technical outlook: Is momentum losing strength?

A fourth consecutive week of correction since early October is in prospect for the Crypto King. It is trading below $78,000 on Friday, with losses of more than 3% so far this week.

A continuation of BTC's correction could take it towards the 50-week Simple Moving Average (SMA) at $75,761. Should the weekly close fall below that level, further declines towards the 200-week SMA at $67,468 could follow.

At 51, the weekly Relative Strength Index (RSI) is approaching the neutral 50 mark, signalling a moderation in bullish momentum. The Moving Average Convergence Divergence (MACD) histogram, meanwhile, is still positive but its bars are fading. Together, these signals suggest the broader upward momentum has not broken down, although nearby resistance and the continuing pullback are eroding its strength.

A recovery, by contrast, could carry BTC towards $78,661, the 61.8% Fibonacci retracement level drawn between the August 2024 low of $49,000 and the October 2025 record high of $126,199. If this level holds, the next potential destinations are the 50% retracement at $87,823 and then the 100-week SMA at $89,358.

A bearish near-term bias persists on BTC's daily chart. While the price remains above the 200-day Exponential Moving Average (EMA) at $76,426, the 100-day EMA at $77,820 continues to restrict it.

Underlying support is still evident in the longer-term trend structure through the 200-day EMA. However, BTC's position well below the 50-day EMA at $80,598 reinforces the corrective bias. 

The daily RSI is at 35, just above oversold territory, and the MACD remains negative and subdued. Both indicators point to continued downward pressure, even with long-term support close by.

Any upward move faces immediate resistance near $77,820 at the 100-day EMA, followed by the 50-day EMA around $80,598. Beyond these, the more substantial horizontal barrier at $85,000 is likely to restrict a stronger rebound if the price reaches it.

The key downside support is the 200-day EMA at $76,426. A decisive breach would create room for a deeper decline; remaining above it, however, would preserve the interpretation of the present pullback as a downward correction within the broader bullish structure.

(The technical analysis of this story was written with the help of an AI tool. Know more.)