Bitcoin forms lower high after rejection near $85,000

Bitcoin dropped nearly 3% on Thursday after an upward move failed near $85,000. Bitcoin returned to around $81,500 after Tesla reported lower-than-expected Q3 capital expenditure. TradingView data showed BTC/USD retreating around Wednesday's closing level before falling below $82,000. Bitcoin erased Wednesday's entire advance, which had reached approximately $84,840 on Bitstamp.

Stronger-than-expected US corporate earnings had supported gains across cryptocurrency and equity markets. However, Tesla's results after Wall Street closed offered less encouraging signals than results from SpaceX and General Motors earlier in the week. Tesla reported Q3 revenue of $28.05 billion, slightly below Bloomberg's estimate of $28.13 billion. Tesla reported capital expenditure of $4.73 billion, substantially below the projected $7.96 billion. The capital expenditure figures appeared to increase concerns about the AI sector while markets recovered from last week's sell-off in Asia's technology stocks.

Ryan Lee, Direxion's senior vice president of product and strategy, said lower capital expenditure suggested less commitment to the AI spending race than expected from Tesla CEO Elon Musk. Musk said during Tesla's earnings call that spending would increase through 2028. Musk said capital expenditure was coming in slightly below expectations but would become more substantial next year. Musk said spending would reach tens of billions in 2028.

South Korea's technology-heavy KOSPI Composite Index closed Thursday down 3.52%. The index struggled to maintain a recovery after falling to 5,460 points last week, the lowest level since late July.

Onchain data indicated a substantial rise in open interest across cryptocurrency trading platforms before Bitcoin reversed. CoinGlass figures showed open interest reached $55.95 billion late Tuesday after a 4.5% increase over 24 hours. CoinGlass figures put open interest at the highest level since September 25. Such increases make markets more vulnerable to cascading liquidations of long or short positions, which can deepen brief price reversals.

Bitcoin's three-day chart showed rejection at a descending resistance trend line, maintaining the sequence of lower highs. Crypto trader and analyst Rekt Capital argued on Tuesday that Bitcoin needed to overcome that resistance before sustained upward momentum could develop. The $80,000 to $81,500 range now provides key support because the range contains the cost basis of US spot Bitcoin exchange-traded funds.