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Crypto and Stocks Fall After Higher-Than-Expected September Inflation Data

BearishHigh impact
BTCUSD$81,464.27 −0.17%ETHUSD$2,379.15 −1.64%MSTR$143.24 −5.87%XRPUSD$1.32 −0.54%DOGEUSD$0.0806 −1.47%

Major cryptocurrencies and stock markets declined on Wednesday after hotter-than-expected inflation data cooled investor expectations for aggressive interest rate cuts. Bitcoin (CRYPTO:BTCUSD) dropped sharply into the low $81,000s, while Ethereum (CRYPTO:ETHUSD) fell below $2,400. Crypto-related equities also suffered losses, with Strategy Inc Class A (NASDAQ:MSTR) dropping 5.87%. The total cryptocurrency market capitalization contracted by 2.20% over 24 hours to $2.84 trillion.

The retreat followed the release of September inflation figures, showing the Consumer Price Index rose to 3.7% year-over-year, surpassing economist forecasts of 3.6%. The hotter reading heightened concerns that interest rates could stay elevated longer. In derivative markets, the price drop triggered over $450 million in crypto liquidations within 24 hours, including nearly $400 million in bullish bets. At the same time, Bitcoin open interest increased 1.41%, pointing to a rise in short selling.

Despite the pullback, market indicators suggest a potential turning point ahead. Most tracked analysts remain optimistic on Bitcoin outlooks compared to earlier in the summer. Furthermore, Bitcoin has traded in a tight band around key $82,000 support and resistance levels for about 50 days, setting up the potential for a decisive price breakout. Investors are also monitoring upcoming central bank policy meetings, where interest rate expectations remain split between holding rates steady and potential future cuts.

Key points

  • September CPI inflation rose to 3.7% year-over-year, above the 3.6% expected by economists.
  • Bitcoin fell into the low $81,000s and Ethereum broke below $2,400 as the overall crypto market cap dropped 2.20%.
  • Over $450 million in crypto positions were liquidated in 24 hours, with nearly $400 million coming from long positions.
  • Strategy Inc Class A fell 5.87% alongside broader declines in crypto-linked stocks.
  • Bitcoin open interest grew 1.41% during the price decline, signaling an increase in short selling activity.

Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org

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Questions and answers

Why did Bitcoin and Ethereum drop today?

Cryptocurrencies fell after September Consumer Price Index inflation came in at 3.7%, higher than the expected 3.6%. Higher inflation raised concerns that interest rates could remain elevated.

How much crypto was liquidated after the CPI report?

More than $450 million in crypto positions were liquidated over 24 hours, with nearly $400 million representing bullish long positions.

What is the current inflation rate?

The September Consumer Price Index rose to 3.7% year-over-year, up from 3.4% previously and above the 3.6% forecasted by economists. Core CPI reached 2.6%.