Cryptocurrencies and global stock markets experienced a sell-off on Thursday as hotter-than-expected U.S. inflation data pushed Bitcoin down toward USD 80,000. This market decline came in the wake of Wednesday’s consumer price report, which amplified expectations that the Federal Reserve might implement another interest rate hike.
Concurrently, technology stocks dropped, crypto liquidations neared USD 1 billion, and Bitcoin exchange-traded funds registered fresh outflows. This wider market retreat mirrored mounting anxieties regarding elevated borrowing costs and diminished appetite for higher-risk investments.
Bitcoin Price Slides as US Inflation Raises Fed Rate Fears
During early Asian trading hours, Bitcoin briefly drifted toward USD 80,000 prior to a recovery attempt near USD 81,500. However, as selling pressure persisted, this rebound faltered close to USD 81,000. Market figures indicated that the leading cryptocurrency dropped over 2% within a 24-hour period.
Its decline followed Wednesday’s U.S. Consumer Price Index report, which revealed that September inflation accelerated. Annual headline inflation climbed to 3.7%, moving up from August’s 3.4%. This figure also surpassed economists’ forecasts, reigniting worries regarding persistent price pressures.
At the same time, core inflation—which strips out food and energy—rose from 2.4% to 2.6%. While escalating energy costs drove the headline increase, stronger core inflation heightened concerns over broader price escalation.
In response to the data release, traders recalibrated their projections for the Federal Reserve’s upcoming October meeting.
Polymarket data indicated the odds of an October rate hike briefly touched nearly 50% before retreating toward 30%. In a similar fashion, the CME FedWatch tool showed the probability jumped from roughly 22% to 47% before moderating to 26%.
Even with these shifts, markets continued to lean toward an October rate pause. Yet, expectations for a December rate hike remained strong, with traders placing roughly 70% odds on an additional 25-basis-point increase.
Crypto Liquidations Surge as Bitcoin ETF Outflows Return
The inflation report likewise impacted institutional investment flows, prompting traders to scale back their exposure to digital assets. On October 14, U.S. spot Bitcoin ETFs faced renewed selling pressure. Vikram Subburaj, CEO of Giottus, pointed to USD 150.5 million in net outflows, which completely reversed the prior day’s USD 175.7 million inflow.
Separately, another reported SoSoValue metric put Wednesday’s outflows at USD 261.5 million. While the exact totals varied between reports, both sets of figures pointed to a reversal in fund flows. Concurrently, CoinGlass statistics showed roughly USD 966.2 million in cryptocurrency liquidations over a 24-hour span, with long positions making up the vast majority of these forced closures as falling prices caught leveraged traders off guard.
The sell-off reached well beyond Bitcoin. Ether slumped 5.7% to trade near USD 2,360.53, XRP fell 4.7%, Solana dropped 4.8%, Cardano lost 6%, and BNB declined 3.5%. Dogecoin also shed 5.6%, while the TRUMP token retreated by 7%.
Bucking the general downward trend among the top 100 cryptocurrencies, PYTH stood out by posting gains of over 7%.
Read More; Bitcoin Slips Near USD 81,150 as Hot US CPI Sparks USD 1B Liquidations
Global Stocks Decline as Higher Rates Pressure Risk Assets
Traditional financial markets also softened as investors processed the inflation figures alongside shifting interest rate expectations.
Nasdaq futures pulled back 1%, extending a 2% sell-off from Wednesday. Meanwhile, South Korea’s KOSPI index plummeted 8%, forcing circuit breakers into action amid steep market losses.
Technology and artificial intelligence shares encountered heavy selling as investors weighed future earnings potential against the backdrop of rising borrowing costs. STS Digital, a market-making firm, cautioned that ongoing uncertainty regarding the Federal Reserve’s next policy move could suppress market liquidity and diminish demand for risk-on assets.
Even so, STS Digital representative Anderson anticipated that the Fed would keep rates untouched in October, a perspective that aligns with the greater-than-70% probability of a pause indicated by CME futures.
Furthermore, elevated interest rates tend to enhance the attractiveness of yield-bearing assets over cryptocurrencies, which typically do not offer guaranteed returns. Market reactions also underscored anxieties surrounding energy prices, bond market volatility, and technology stock valuations.
Conclusion
The retreat of Bitcoin toward USD 80,000 came on the heels of hotter U.S. inflation figures, heightened rate hike projections, and renewed institutional selling. Crypto liquidations nearing USD 1 billion accompanied widespread drops across major digital assets and global equities. As markets reevaluate inflation dynamics and borrowing expenses, the Federal Reserve’s October policy decision remains a primary point of focus.
