Investing.com-- Bitcoin slipped below $82,000 on Tuesday as elevated oil prices and persistent geopolitical tensions weighed on risk sentiment, while investors assessed the Federal Reserve’s interest-rate outlook ahead of its policy meeting next week.

The world’s largest cryptocurrency was trading at around $81,511.2 by 05:19 ET (09:19 GMT), down about 1.5% on the day.

Bitcoin had risen above $83,000 in the previous session but failed to hold gains. It has struggled to sustain recovery after retreating from levels above $85,000 earlier this month.

Oil hits 5-mth high; Fed outlook in focus

Oil prices remained elevated on Tuesday, with Brent crude futures rising to as high as $111.05 a barrel -- a fresh five-month high.

Attacks on Saudi Arabian infrastructure and continued disruption risks in the Middle East have kept energy markets on edge, raising concerns that higher fuel costs could sustain inflationary pressures.

Higher oil prices could complicate the Fed’s efforts to bring inflation back towards its 2% target, potentially limiting its flexibility to ease monetary policy.

Tighter financial conditions and elevated borrowing costs tend to weigh on risk-sensitive assets such as cryptocurrencies, which have benefited in previous periods from expectations of easier monetary policy and improved liquidity.

Investors are now focused on the Fed’s October 27-28 meeting for clues on the future path of interest rates.

Markets have scaled back expectations of an imminent rate increase, with FedWatch data showing an 18% probability of a hike at the upcoming meeting. Traders are pricing in a 75% chance of a hike in December.

Recent U.S. inflation data have reinforced rate concerns. Consumer prices rose 3.7% year-on-year in September, while core inflation increased 2.6%, both slightly above economists’ expectations.

Gasoline prices jumped 9.1% during the month, accounting for more than half of the monthly increase in headline consumer prices. The data revived concerns that energy-driven inflation could keep interest rates higher for longer.

Crypto price today: altcoins edge lower

Most altcoins fell on Tuesday, extending losses amid a cautious mood.

World no.2 crypto Ethereum fell 2.2% to $2,385.92.

World no. 3 crypto XRP fell 1.4% to $1.2953.

Solana eased 1.2%, while Cardano fell 2%.

Among meme tokens, Dogecoin fell 0.8%.

Vahid Karaahmetovic contributed to this report.