Despite the extreme volatility, bitcoin was only marginally higher than it was 24 hours earlier, leaving its market capitalization almost unchanged at just under $1.65 trillion.
In the derivatives market, bitcoin’s price volatility hit bullish traders far harder than short sellers. According to Coinglass data, approximately $172 million in long bitcoin positions were liquidated over the 24-hour period, compared with $42 million in shorts. Across the broader crypto market, total leveraged liquidations topped $929 million, with wiped-out long bets accounting for more than $777 million.
According to the U.S. September Consumer Price Index (CPI) report, the higher-than-expected inflation reading has cast doubt on the outlook for a sustained decline. Furthermore, while surging oil prices were viewed as the primary driver, Bitunix analysts noted that price pressures extended beyond energy, increasing the likelihood of further Federal Reserve intervention.
“The Federal Reserve therefore has stronger grounds to maintain a restrictive policy stance in the near term, with market-implied odds of an October rate hike briefly returning to around 50%,” the analysts wrote in a daily brief.
Meanwhile, the analysts suggested that attention will now shift from a single CPI report to whether inflation remains persistent and whether the Federal Reserve responds to higher energy prices with further tightening. If Treasury yields and the dollar continue to strengthen, then crypto markets could remain under pressure from deleveraging, they warned. However, if rate expectations ease again, then “the next test will be whether $BTC can reclaim the upper liquidation zones and whether any rebound is supported by a healthier positioning structure.”
