The global cryptocurrency market value fell by 3.2%, evaporating $89.36 billion to reach $2.71 trillion. Meanwhile, following inflation data in the United States that exceeded expectations, Bitcoin, as a pioneering cryptocurrency, dropped from a 24-hour high of $83,700 to below $81,000, with the probability of the Federal Reserve raising interest rates rising to 44%.

This round of market decline triggered nearly $1 billion in liquidations, with traders who bet on price increases bearing most of the losses.

Bitcoin falls after the probability of a Fed interest rate hike increases

Today, the price of Bitcoin fell to $80,226 at one point, with a decline of 3.5% over the past 24 hours.

The sell-off occurred after the release of the September Consumer Price Index ( CPI ) report on October 14th. Inflation in the United States rose to 3.7% year-on-year, higher than 3.4% in August. The higher figure diminished market expectations for a short-term interest rate cut.

Meanwhile, data from CME FedWatch shows that the probability of a rate hike has risen to 44%, higher than the previous low of 18%. On September 16th, the Federal Reserve raised interest rates by 0.25 percentage points, marking the first rate hike since 2023.

Currently, the market is focusing on the U.S. Producer Price Index ( PPI ) report to be released on October 15th, in order to gain more insights into inflation before the Federal Reserve's meeting on October 27th-28th.

Near $1 billion in liquidations hit traders

The sharp drop in Bitcoin prices forced traders to close their leveraged positions on major crypto exchanges. According to CoinGlass, a total of 182,574 traders were liquidated within the past 24 hours, resulting in a total loss of $972.46 million.

Among them, long positions amounted to $891.2 million, accounting for 91.7% of all liquidations. These traders had originally bet on a rise in prices, but they suffered heavy losses as Bitcoin fell.

Ethereum also encountered a large-scale liquidation, with the amount of liquidation exceeding $293 million, and its price once approached $2,390.

Bitcoin ETF Capital Outflow Intensifies Selling Pressure

Institutional demand is also weakening. Spot Bitcoin ETF recorded a net outflow of $261.4 million on October 14, ending three consecutive weeks of net inflows. Since October 7, these funds have seen a cumulative net outflow of approximately $1.02 billion.

Glassnode warns that Bitcoin is facing weak buying demand, as ETF sellers and investors choose to sell when they approach break-even prices. This leaves little room for new demand to support the price.

Can Bitcoin hold the $80,000 support level?

The short-term support level for Bitcoin is between $80,000 and $80,500. According to Glassnode analyst, the largest buying zone on the Binance spot market has shifted from $81,000 to $80,000.

However, $80,000 is lower than the cost base of spot Bitcoin in the United States, which is around $81,500, representing the average price at which these funds purchased Bitcoin. Glassnode data shows that if the daily closing price falls below $80,000, it could result in average ETF holders incurring losses and weaken the recent support level.

"If Bitcoin falls below $80,000, then the clearing accumulation areas below that level, as well as the real market average close to $78,000, could come into view."

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