Bitcoin dropped to $81,500 on October 14 following the release of US inflation data. The Consumer Price Index rose 3.7% in September, surpassing the 3.6% forecast and the 3.4% recorded in August. Core CPI increased 0.3% month-over-month, exceeding the expected 0.2%.
Market expectations for a Federal Reserve interest rate hike in October rose to 41.5%, up from 22% the previous day. Traders estimate a 92% probability of at least one additional rate hike by the end of the year. These projections follow the monthly inflation increase of 0.6%.
The market volatility resulted in over $250 million in crypto long liquidations within 24 hours. The total cryptocurrency market capitalization fell to approximately $2.75 trillion. Ethereum, XRP, and Solana each declined by more than 2% during the session.
Traditional financial markets also reacted to the inflation report. The S&P 500 and the Nasdaq both saw declines of around 1%. Investors are concerned that persistent inflation may force the Federal Reserve to maintain a tighter monetary policy throughout the year.
