Bitcoin slipped after U.S. inflation numbers came in hotter than analysts expected, reviving market speculation that the Federal Reserve may raise rates again in October.

Inflation data and market reaction

The consumer price index for September increased 0.6% month-over-month and 3.7% compared with a year earlier, outpacing the 3.6% consensus. Gasoline prices surged 9.1% in the same period, contributing more than half of the overall rise. Core CPI, which excludes food and energy, climbed 2.6% year-over-year versus the 2.5% estimate. In response, the CME FedWatch tool lifted the probability of an October rate hike to between 44% and 49%, up from 22% before the report. Treasury yields followed suit, with the 10-year benchmark reaching roughly 5.3% and the two-year moving to about 4.9%.

Impact on Bitcoin technicals and derivatives

Bitcoin fell around 1.5% to $82,142, hovering inside a Fibonacci “golden zone” bounded by $81,847 and $82,305. The next immediate support level sits near $81,603, while a break below could expose a swing low around $80,365. On the technical side, the Average Directional Index registered 27.7, indicating a still-present but weakening trend, and the Relative Strength Index slipped to 48.7, just under the neutral 50 mark. The Squeeze Momentum Indicator has been negative for eight sessions, hinting at compressed volatility ahead of a potential breakout.

Derivatives markets felt the shock as more than $281 million in crypto positions were liquidated in the previous 24 hours, with the bulk coming from Bitcoin long contracts. The rapid unwind amplified price pressure, a pattern often seen when leveraged traders are forced to exit losing bets.

Broader market implications

Higher bond yields make low-yielding assets like Bitcoin less attractive, especially when the U.S. dollar strengthens. The S&P 500 and Nasdaq also slipped, down 0.6% and 0.8% respectively, as investors reassessed risk on the back of tighter monetary expectations. The overall crypto market cap shrank by roughly 0.7% to $2.8 trillion, with Ethereum, Solana and XRP all posting declines.

Why it matters

The episode underscores how macro-economic data can quickly cascade through cryptocurrency prices, particularly when leveraged exposure is high. With the Fed’s next decision looming, Bitcoin and other digital assets may continue to react sharply to any shift in inflation trends or policy signals, influencing both retail sentiment and institutional positioning.