Bitcoin’s Post-CPI Whipsaw Liquidates Over $500M Again
Bitcoin saw sharp price swings following a lower-than-expected U.S. inflation report, which initially boosted optimism and pushed Bitcoin close to $90,000. However, sellers quickly reversed these gains, resulting in $575 million of crypto liquidations in 24 hours—$368 million of which were long positions, and $202 million related to Bitcoin. The recent declines were fueled by profit-taking in derivatives, not just spot selling. Despite this volatility, strong demand remains between $85,000 and $81,000, with Bitcoin up nearly 1% in the past day, now around $88,100. Prediction markets reflect optimism, with a 61% chance estimated for Bitcoin to reach $100,000 next. Meanwhile, the Bank of Japan raised interest rates for the first time in decades, potentially pressuring risk assets by ending a long-standing source of global liquidity. Leverage in crypto is still high, as evidenced by several days of $500+ million in liquidations this month, mostly from over-optimistic longs. As year-end approaches, shrinking liquidity and defensive positioning are likely to heighten crypto market volatility.
