Bitcoin slides to $79,730 as $939m in crypto positions liquidated
Bitcoin fell to an intraday low of $79,730 before recovering to around $82,000, as stronger-than-expected US wholesale inflation data intensified a cryptocurrency selloff that liquidations tracker CoinGlass put at $939.24 million across 176,506 traders.
The largest single liquidation, according to CoinGlass, was a $12 million BTC-USDT position on Binance. The move followed a Labor Department report showing US producer prices rose 1.3% in September, the biggest monthly increase since March 2022, with annual wholesale inflation accelerating to 6.3%. Core producer prices, excluding food and energy, rose 0.7% against expectations of 0.3%, taking the annual rate to 5%. The figures came a day after a consumer inflation reading of 3.7%.
Ricky Ho, chief investment officer of a single-family office, said the core reading was particularly concerning because it suggested businesses faced broader cost increases that could eventually reach consumers. Energy prices rose 10.8% in September, raising transportation, manufacturing and distribution expenses, and Ho warned that firms must either absorb those increases through lower margins or pass them on, potentially prolonging inflation and forcing the Federal Reserve to keep monetary policy restrictive. The Kobeissi Letter noted that the monthly headline PPI increase more than doubled expectations.
Markets responded unevenly. The benchmark 10-year US Treasury yield fell to around 5.06% despite the inflation surprise, as investors moved into government bonds amid a deepening technology-stock selloff. Mohamed El-Erian, chief economic adviser at Allianz, attributed the decline partly to investors seeking safety as previously high-flying technology stocks came under pressure, and pointed to concerns about the resilience of technology investment, emerging credit stress and elevated borrowing costs. Futures markets briefly priced in nearly a 50% chance of an October rate hike after the consumer inflation report, but the probability fell below 30% despite Thursday's producer-price surprise. Can-Luca Köymen, investment strategist at Swiss-regulated digital-asset bank Sygnum, told CryptoSlate that the latest numbers strengthened the case for additional tightening, saying a 28 October hike had moved "from a tail to a live risk".
Options traders have repositioned accordingly. Nick Forster, founder of options platform Derive, said in a note that the implied probability of Bitcoin falling below $80,000 by Friday's expiry nearly doubled to 18.4% from 9.5% over the previous 24 hours, while the probability of Bitcoin reaching $100,000 by Christmas fell to 9.7% from 12.5%. Derive recorded $129 million in Bitcoin and Ethereum options volume in the three hours after Wednesday's consumer inflation report, twelve times the preceding three hours, and one trader spent $151,000 on a Bitcoin put spread covering 500 BTC, a position Forster said could net $849,000 if Bitcoin falls below $78,000 by Friday morning. Mauricio Di Bartolomeo, co-founder of Bitcoin lending platform Ledn, said Friday's expiry involves roughly $1.3 billion in positions, with substantial put exposure between $76,000 and $80,000, while around 140,000 BTC in options worth nearly $12 billion expire on 30 October, about a third of outstanding Bitcoin options on Deribit. Attention now turns to Federal Reserve Chair Kevin Warsh, scheduled to speak at the International Monetary Fund's meetings in Bangkok at 11:30 p.m. Eastern on Thursday, ahead of Friday's expiry.
