Bitcoin fell on Thursday, reversing gains after investor optimism following the Federal Reserve's decision to keep interest rates on hold proved short-lived.
The flagship cryptocurrency was down 1.5% at $80,028, after slipping below the $80,000 threshold earlier in the session. The Nasdaq fell at the open Thursday, as a risk-off mood gripped markets and weighed on cryptocurrencies.
Bitcoin was largely unmoved after PCE price index data showed an increase of 0.5% last month, following a 0.3% rise in August, the Commerce Department said Thursday. The 12-month PCE inflation rate climbed to 3.6%, from 3.4% a month earlier.
The Fed's rate-setting committee voted 10-2 to hold rates steady, with two dissents from officials who said they would have preferred to raise rates by a quarter point. Markets are currently pricing in a more than 80% chance that the central bank will hike by a quarter point when it reconvenes in December, according to CME FedWatch.
Tensions in the Middle East have also kept a lid on risk appetite. The U.S. has told several Gulf states to prepare for a short, intense military campaign after the midterm elections, the Wall Street Journal reported.
Meanwhile, long-term bitcoin holders own about 4 million bitcoin that were bought between $85,000 and $118,000 apiece, according to analysts from Glassnode. That means many investors are underwater at the current price level of around $80,000. More than half of all long-term holders' coins were bought above that critical level, the analysts said.
Ether was down 1.4% at $2,324.32.
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