Five minutes after the US Bureau of Labor Statistics released October inflation data, roughly $200 million in leveraged crypto trading positions were liquidated. The flash liquidation cascade unfolded as Bitcoin plunged below $74,000, briefly touching $73,500 before stabilizing near $73,784. This price level marked a 1% decline over the past 24 hours from an intraday high of $75,500.
The downturn extended Bitcoin’s ongoing correction, with the asset already down 4.5% over the past week and tumbling more than 11% over the last 30 days. Selling pressure intensified after the October Consumer Price Index (CPI) rose 0.4% month-over-month, topping economists’ consensus forecast of 0.3%.
Shelter Costs Emerge as Biggest Driver
The monthly inflation uptick was primarily driven by the housing sector. Shelter costs rose 0.3%, accounting for more than 30% of the total monthly increase. During the same period, food prices climbed 0.5% while energy costs advanced 0.7%. Meanwhile, Core CPI, which excludes food and energy, rose 0.3% month-over-month. This figure came in hotter than economists’ 0.2% estimate and marked the third consecutive month of Core CPI rising at 0.3%.
This inflation release carried a unique caveat, as the US Department of Labor did not release annual inflation figures for October. The lack of year-over-year data stemmed from data collection disruptions during a government shutdown in the prior year. Nevertheless, the higher-than-expected monthly inflation pace was enough to shift monetary policy calculations.
Signals of a 50-Basis-Point Rate Hike
Market participants are now fully pricing in a 25-basis-point rate hike at the upcoming Federal Reserve meeting on December 9, bringing rates to the 4.00% to 4.25% range. However, a more hawkish scenario emerged after Fed Governor Christopher Waller warned of the potential for a 50-basis-point hike if inflation remains persistent. The central bank’s room for monetary easing narrowed further as US labor data showed the addition of 165,000 jobs in October.
Pressure on crypto prices mounted further as selling was also fueled by outflows from institutional investment products. US spot Bitcoin ETFs registered net outflows of $1.28 billion between November 2 and November 6, dominated by $1.21 billion in withdrawals from BlackRock’s IBIT. Capital flight persisted on November 9 with an additional $201 million in outflows.
For crypto market participants, this sequence of inflation data and institutional outflows highlights the fragility of speculative positions when interest rate expectations shift. Market trajectory now hinges on forthcoming economic data, with traders closely watching the Producer Price Index release on November 13 and the Fed meeting minutes on November 18, 2026.
Sourced from crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
