Bitcoin briefly crashes below $80,000 as accelerating inflation forces traders to abandon bullish targets, with a $12 billion options expiry adding to market uncertainty.

Bitcoin registered an intraday low of $79,730 before recovering to around $82,000 as surging US wholesale inflation intensified a cryptocurrency selloff that triggered nearly $940 million in liquidations.

This price action extended losses as stronger-than-expected inflation data raised concerns about another interest rate hike by the Federal Reserve.

According to CoinGlass, 176,506 traders were liquidated during the period, totaling $939.24 million. The largest single liquidation occurred on Binance, where traders closed a BTC-USDT position worth $12 million.

The selling followed a Labor Department report showing US producer prices jumped 1.3% in September, the biggest monthly increase since March 2022. Annual wholesale inflation accelerated to 6.3%, its highest level in nearly four years.

Core producer prices, excluding food and energy, rose 0.7% against expectations of 0.3%, taking the annual rate to 5%. The figures followed Wednesday's consumer inflation reading of 3.7%, indicating that price pressures were spreading beyond the energy market.

Ricky Ho, chief investment officer of a single-family office, said the core reading was particularly concerning because it suggested businesses were facing broader cost increases that could eventually reach consumers.

Energy prices surged 10.8% in September, raising transportation, manufacturing and distribution expenses. Ho warned that businesses must either absorb those increases through lower profit margins or pass them on to customers, potentially prolonging inflation and forcing the Fed to maintain restrictive monetary policy.

Source link