Bitcoin slides below $83,000 as US inflation revives Fed hike bets
Bitcoin fell below $83,000 on Wednesday after stronger-than-expected US core inflation data revived expectations of further Federal Reserve interest rate increases, triggering a fresh wave of liquidations across cryptocurrency markets. CoinGlass data cited in reports showed more than $100 million in leveraged positions were liquidated in the hour after the inflation report, pushing 24-hour liquidations above $220 million.
The Bureau of Labor Statistics reported that consumer prices rose 3.7% annually in September, above the 3.6% forecast and August's 3.4% reading. Headline prices rose 0.6% on the month, matching expectations, while core prices increased 0.3%, above the 0.2% consensus, with annual core inflation accelerating to 2.6% from 2.4%. Energy was the largest contributor, with gasoline up 9.1% and the broader energy index up 5.2%, though shelter, used vehicles, recreation, education, air travel and medical services also rose. The data marked the 67th consecutive month US inflation has stayed above the Fed's 2% target.
Bond markets reacted sharply, with the benchmark 10-year Treasury yield reversing an earlier decline to rise roughly 7 to 9 basis points. Kalshi's prediction market showed the probability of a 25-basis-point Fed hike in October rising to 55% from 21%, while traders increased bets on further tightening through 2027. The Fed had raised its benchmark rate by 25 basis points in September to a target range of 3.75% to 4%, its first increase in more than three years. Robin Brooks, a senior fellow at the Brookings Institution, warned the figures risked reigniting instability across global bond markets.
Can-Luca Köymen, investment strategist at Sygnum Bank, told CryptoSlate the stronger reading had reopened the possibility of another increase this month, though the bank still expects policymakers to hold rates steady. "Core at 0.3%, above consensus, puts an October hike back in play after the market had faded it to one in five," Köymen said, noting the Fed's preferred PCE inflation measure will not be released until the day after its October policy decision. Lewis Huang, an analyst at Bitget, told CryptoSlate that $81,300 is Bitcoin's immediate support level, warning a sustained decline below it could expose the asset to further losses, particularly if Treasury yields rise further and the dollar strengthens.
The inflation shock arrived as Bitcoin's underlying demand indicators were showing signs of improvement after two months of weakness. CryptoQuant data cited in reports estimated total demand increased by about 69,000 BTC, with spot demand recovering alongside continued growth in futures demand. The next major test comes at the Federal Reserve's Oct. 27–28 policy meeting, followed by the September PCE release on Oct. 29. Until then, Bitcoin's ability to defend the $81,300 support level will help determine whether improving spot demand can withstand another round of monetary tightening expectations.
