Bitcoin Falls Below $81,000 as Hot U.S. Inflation Boosts Rate Hike Odds
Bitcoin (BITSTAMP:BTCUSD) slid below $81,000 after touching a 24-hour peak of $83,700, eventually reaching an intraday low of $80,226. The broader digital asset market lost $89.36 billion in value as total market capitalization fell 3.2% to $2.71 trillion. The sharp market contraction forced nearly $972.46 million in liquidations across 182,574 crypto traders over 24 hours, with bullish long positions accounting for over 91% of total forced liquidations.
The sell-off was sparked by the September Consumer Price Index report showing U.S. annual inflation accelerated to 3.7%, up from 3.4% in August. The higher-than-expected reading reduced expectations for near-term monetary easing and raised the implied probability of a Federal Reserve rate hike to 44%. Institutional selling added further pressure, as spot Bitcoin exchange-traded funds recorded $261.4 million in net daily outflows, expanding total net redemptions since October 7 to approximately $1.02 billion.
Investors are currently awaiting the U.S. Producer Price Index release scheduled for October 15 for further economic signals ahead of the Federal Reserve policy meeting on October 27 and 28. Analysts are closely watching Bitcoin's critical support zone between $80,000 and $80,500, noting that a daily close below $80,000 could place the average spot ETF holder below their purchase cost basis and risk further downside toward $78,000.
Key points
- Bitcoin fell to a 24-hour low of $80,226 after previously hitting an intraday high of $83,700.
- U.S. inflation rose to 3.7% in September, increasing market expectations of a Federal Reserve rate hike to 44%.
- Over $972 million in crypto positions were liquidated in 24 hours, with long bets accounting for nearly 92% of losses.
- Spot Bitcoin ETFs recorded $261.4 million in daily net outflows, bringing total redemptions since October 7 to $1.02 billion.
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How we writeDisclaimerQuestions and answers
Why did Bitcoin price fall below $81,000?
Bitcoin fell after September U.S. inflation rose to 3.7% year-over-year, exceeding the previous month's 3.4%. The hotter reading reduced hopes for rate cuts and raised Federal Reserve rate hike odds to 44%, driving widespread market liquidations and ETF outflows.
How much was liquidated in the recent crypto market drop?
The sharp price decline triggered $972.46 million in total liquidations across 182,574 traders within 24 hours. Long positions represented $891.2 million, or about 91.7% of all liquidated leverage, as traders betting on price gains faced heavy losses.
What is the key technical support level for Bitcoin now?
Bitcoin's immediate support lies between $80,000 and $80,500. A daily close below $80,000 would push the market price below the estimated average spot ETF cost basis of $81,500, potentially opening the door to further downside toward $78,000.