Bitcoin dropped below $80,000 before recovering toward $82,000 on Thursday as hotter-than-expected inflation data intensified concerns about interest rates and triggered a broad selloff in digital assets.
According to Decrypt, the move resulted in $948.22 million of crypto liquidations over 24 hours, affecting 177,440 traders. Long positions accounted for $858.96 million, or 90.6%, of the total, showing that traders positioned for rising prices bore most of the damage.
Ethereum and XRP fell by almost 5%, while Zcash declined nearly 10%. Only five cryptocurrencies among the 100 largest recorded gains of more than 1% during the session. Bitcoin was trading near $82,000 after several hours of sharp price swings.
Inflation data revives rate concerns
The immediate pressure began with Wednesday’s consumer-price report. Consumer prices rose 3.7% year over year in September, above the 3.6% forecast, while core inflation increased 2.6%, compared with expectations of 2.5%.
Thursday’s Producer Price Index added to the concern. The measure of prices faced by businesses climbed 6.3% annually, well above the 5.5% forecast. Hotter inflation can increase pressure on the Federal Reserve to keep interest rates higher or consider another increase.
Higher rates affect crypto markets in several ways. They can lift Treasury yields, making relatively low-risk government bonds more attractive compared with assets such as Bitcoin. They also increase borrowing costs and can reduce the availability of the cheaper funding often used in leveraged trading. A stronger dollar can add further pressure to risk-sensitive assets.
The source material links much of the inflation pressure to oil. Brent crude was near $104 a barrel, approximately 70% higher than a year earlier, amid the war between the United States and Iran. More expensive oil can raise fuel and shipping costs and increase the cost of transporting goods to consumers.
Iliya Kalchev, an analyst at Nexo, described the move as part of a wider retreat from risk rather than solely a Federal Reserve reaction. Stocks and copper were lower, gold rose and South Korea’s Kospi fell about 8%, according to the report.
Leveraged traders take the largest losses
Liquidation occurs when a trader uses borrowed funds to take a market position and the price moves against it. Once losses consume the collateral supporting the trade, an exchange automatically closes the position. Those forced sales can push prices lower and trigger liquidations among other leveraged traders.
Ethereum recorded the largest liquidation total at $282.03 million, while Bitcoin followed with slightly more than $200 million. The largest individual liquidation was a $12.03 million Bitcoin long on Binance, which was forcibly closed at $80,208.96.
The session was the third-largest day for long liquidations in the previous 90 days, behind October 8 and August 22. Bitcoin’s decline extended the previous day’s inflation-related losses and took the cryptocurrency below $80,000 for the first time in more than a month.
Bitcoin reached $79,711 before buyers moved it back toward $80,925, with the rebound occurring near a rising trend band around $80,286. Its Relative Strength Index, a momentum indicator in which 50 separates stronger and weaker momentum, fell to about 44. The longer-term golden-cross pattern remained in place, however.
ETF holders move back below breakeven
Bitcoin also slipped below the estimated average cost of investors in U.S. spot Bitcoin exchange-traded funds. That average was near $82,300, placing the cryptocurrency roughly 2% below the level and leaving those ETF buyers, on average, underwater again.
Bitcoin had closed above that estimated cost on 21 of the 24 days since September 21. Kalchev said reclaiming the level would be an early test for any recovery, while noting that selling by long-term holders and ETF flows would also matter.
The report said U.S. spot ETF flows recorded $681 million of outflows last week, followed by one day with a $177 million inflow. Kalchev said a more durable advance would require consistently positive ETF flows, less selling by long-term holders and buying that is sustained rather than driven by a short-lived bounce.
On the chart, Bitcoin broke below $81,603, identified as the strongest upper support from its rally between August and October, when it rose from $62,763 to $87,422. A daily close above $81,603 could reopen a route toward $84,245 and the $87,422 swing high. If $80,286 fails, the next cited support levels are $78,002 and $75,092.
The Federal Reserve is scheduled to announce its next rate decision on October 28. Core personal-consumption expenditures inflation is due the following day, and October payroll data are scheduled for November 6.
Moneyiar market picture
Moneyiar data at 9:24 p.m. on October 15 show Bitcoin at $82,209.00, up 0.61% over 24 hours and 0.68% over seven days.
Among the other assets tracked by Moneyiar, NEAR Protocol was at $5.3468, up 11.52% in 24 hours and 17.84% over seven days. Data Network was at $0.1901, down 4.09% over 24 hours and 3.06% over seven days. Holo stood at $0.0003881, up 1.31% over 24 hours but down 5.11% over seven days.
