Bitcoin drops toward $81,300 as October Fed hike odds hit 55%

Bitcoin fell below $83,000 on Wednesday and traded near $81,300 after hotter-than-expected U.S. inflation data increased expectations for another Federal Reserve rate hike. More than $100 million in leveraged cryptocurrency positions were liquidated within an hour of the report, according to CoinGlass.

Bitcoin traded at about $81,767.12, down 2.13% over 24 hours. Total cryptocurrency liquidations exceeded $220 million during that period, following more than $800 million in forced closures earlier.

The Bureau of Labor Statistics reported that consumer prices rose 3.7% in September from a year earlier, above the 3.6% forecast and August’s 3.4% increase. Monthly headline inflation was 0.6%, while core prices, which exclude food and energy, rose 0.3% against expectations for a 0.2% increase.

Annual core inflation accelerated to 2.6% from 2.4%. U.S. inflation has remained above the Federal Reserve’s 2% target for 67 consecutive months. Gasoline prices rose 9.1% in September and accounted for more than half of the monthly increase in headline inflation. The broader energy index increased 5.2%.

Prices also rose for shelter, used vehicles, recreation, education, air travel and medical services. Shelter costs increased 0.4%, while used vehicle prices rose 0.7%.

The 10-year U.S. Treasury yield reversed an earlier decline and rose by about 7 to 9 basis points during the session. Kalshi data showed the probability of a 25-basis-point Federal Reserve rate increase in October rising to 55% from 21%. Traders also increased bets on further rate increases through 2027.

“Core at 0.3%, above consensus, puts an October hike back in play after the market had faded it to one in five,” Can-Luca Köymen, an investment strategist at Sygnum Bank, said. Sygnum still expects policymakers to leave rates unchanged in October, he added.

The Federal Reserve raised its benchmark rate by 25 basis points in September to a target range of 3.75% to 4%. The next policy meeting is scheduled for Oct. 27–28. The September personal consumption expenditures inflation report is due on Oct. 29, one day after the decision.

Higher Treasury yields can increase the appeal of interest-bearing assets and put pressure on speculative investments such as Bitcoin. Köymen expects macroeconomic conditions to have a greater effect on Bitcoin’s short-term direction than daily flows into spot Bitcoin exchange-traded funds.

CryptoQuant data showed that Bitcoin’s underlying demand began recovering after two months of weakness. Total demand increased by about 69,000 Bitcoin, while futures demand continued to grow.

The latest liquidations followed repeated attempts by Bitcoin to hold above $80,000. Lewis Huang, an analyst at Bitget, identified $81,300 as the immediate support level. A sustained break below that level could lead to further losses if Treasury yields and the U.S. dollar continue to rise, he said.