Position 2026-10-28: short (-0.25, confidence 0.54)

Our view for Wednesday, October 28 is a modest bearish lean on Bitcoin, held with moderate conviction. BTC closed Tuesday near $80,800, up about 1% on the day after trading between roughly $79,400 and $81,200. That bounce sits inside a weaker trend: the price is down about 2.6% over the past week and about 4.3% over the past month, and it is still roughly 36% below its all-time high near $126,200. We read Tuesday's gain as a relief move, not a change of direction. Going into a busy macro calendar, we would rather be slightly short than flat. The macro backdrop is the biggest reason for caution. The US dollar has firmed: the UUP dollar fund is up about 1.7% over 30 days. High-yield credit spreads have widened to about 3.3% from roughly 2.9% a month ago, the VIX has risen about 18% over the month to 17.5, and the Nasdaq is down about 2% over the same period. Oil is up more than 10% in a month, inflation breakevens are rising, and September headline CPI came in at +0.65% month over month. Prediction markets put about 94% odds on the Fed holding rates at today's FOMC decision. Over the past 60 days Bitcoin has tended to move with the Nasdaq and against the dollar, so a stronger dollar and wider credit spreads work against it. Today's FOMC decision and tomorrow's GDP and PCE data add event risk. Demand has softened but is not collapsing. US spot Bitcoin ETFs saw about $660 million of net outflows from October 22 through October 26, led by a roughly $636 million outflow on the 22nd. That undid much of the two roughly $525 million inflow days on October 19 and 21. October 27 data is still incomplete because IBIT and FBTC have not reported yet. The Coinbase premium has stayed negative and is below its 30-day average, which points to weaker US spot buying. USDC supply has shrunk by about $4.3 billion in a month. On-chain, long-term holders' share of supply has fallen by about 0.9 percentage points over 30 days, and coin-days destroyed are running about 39% above the prior month. Both fit a picture of older coins being sold into the market. MVRV has also drifted down about 6% over the month. Positioning makes the bounce look fragile. Tuesday's rise was helped by short liquidations clustered between $80,000 and $82,000. Yet perpetual funding has climbed back to about 0.01% per eight hours on the major exchanges, roughly 11% annualized, compared with a 30-day average near 4%. Binance's long/short account ratio has also jumped above its weekly average. Open interest measured in bitcoin has barely fallen despite the long liquidations of October 22 to 24, so leverage has not been cleared out. Options open interest is heavily concentrated at the $80,000 to $82,000 strikes ahead of Friday's large expiry, and the price where call and put open interest balance out is just below $80,000. We think rallies into the $81,000 to $82,000 area may stall, and a break below $80,000 would bring Tuesday's low near $79,400 back into view. Why is the lean only modest? Broad sentiment is neutral. The Fear & Greed Index is at 51 and search interest is low, so there is neither euphoria to bet against nor capitulation to buy. Prediction markets give roughly 73% odds that Bitcoin settles above about $79,800 at today's 5pm ET close, and their median year-end estimate is near $82,500, close to the current price. Hashrate keeps rising, dated futures still trade at a positive premium of about 5.3% to 5.5% annualized, 30-day realized volatility is a calm 25% or so, and demand for downside protection in options has eased since last week. The FOMC outcome could push the market either way. Taken together, this supports a measured short tilt with close attention to the $80,000 level, not an aggressive bearish bet. This note is market commentary, not investment advice.