Bitcoin Fell Below $81,000: How Did U.S. Inflation Trigger a New Wave of Sell-offs?
Nearly $1 billion in crypto positions were liquidated within 24 hours as Bitcoin fell below $81,000. The latest wave of market turbulence was triggered by developments in the United States, where inflation once again came in higher than expected.
On 14 October, the United States announced that annual inflation had reached 3.7% in September. This was above analysts' forecasts of 3.6% and an increase from the 3.4% recorded in August.
At first glance, the difference may seem small. For financial markets, however, it is an important signal that the fight against inflation is far from over.
The reaction was swift. Bitcoin began to decline, while the sell-off spread to other crypto-assets.
What do the inflation figures reveal?
According to the US Bureau of Labor Statistics, consumer prices increased by 0.6% in September compared with the previous month.
Energy costs had a particularly significant impact.
Gasoline prices rose by 9.1% in just one month, accounting for more than half of the monthly increase in the overall Consumer Price Index.
Core inflation, which excludes food and energy, also increased to 2.6% year over year.
These figures matter because they indicate that inflationary pressures are not limited to fuel prices alone.
Why does US inflation affect Bitcoin?
The connection runs through the US Federal Reserve (Fed), which sets the country's key interest rates.
When inflation remains elevated, the Fed has less room to cut interest rates. Under certain circumstances, it may even need to raise them again.
Higher interest rates generally mean more expensive borrowing, a reduced appetite for risk and greater attractiveness of certain traditional financial instruments.
Bitcoin does not exist in isolation from the global economy.
When investors expect tighter monetary policy, they often reduce their exposure to riskier assets. This can affect both technology stocks and the crypto market.
Following the release of the inflation data, US Treasury yields rose and the dollar strengthened.
Nearly $1 billion in liquidations within 24 hours
Bitcoin's decline was accompanied by a significant wave of liquidations in the leveraged trading market.
According to publicly available data, approximately $951 million worth of positions were liquidated within 24 hours, with around $876 million coming from long positions.
This means that traders betting on rising prices were the hardest hit.
In leveraged trading, investors use borrowed funds or collateral to open larger positions. When the market moves against them and their collateral becomes insufficient, their positions may be forcibly closed.
This creates a domino effect: prices fall, positions are liquidated, and forced selling can further accelerate the decline.
It is important to clarify that the reported $951 million represents the value of liquidated positions, not necessarily the amount of traders' own capital lost.
“Sharp declines like these once again demonstrate just how dangerous trading with excessive leverage can be. Even a relatively small market movement can lead to substantial losses and forced position closures. For long-term investors, however, market corrections may present opportunities to buy at lower prices, provided their decisions align with their personal investment strategy and the level of risk they can afford to take. It is important not to give in to panic and to remember that volatility is an inherent part of the crypto market.”
What comes next for Bitcoin?
Following the sell-off, Bitcoin reached approximately $80,800 in the early hours of 15 October.
In the short term, the market is likely to remain sensitive to new economic data from the United States, interest rate expectations and capital flows into Bitcoin-related investment products.
Investors will also be watching for further signals from the Federal Reserve to assess whether higher inflation could lead to additional monetary tightening.
But does this necessarily mean Bitcoin will continue to fall?
No. Although the macroeconomic environment has a significant influence on short-term price movements, Bitcoin's price also depends on a range of other factors, including institutional demand, market liquidity and overall investor sentiment.
Higher inflation does not, by itself, determine Bitcoin's direction. However, it demonstrates why even a single economic report can trigger such a strong reaction across the crypto market.
