CPI surpassed expectations and sparked fears of interest rate hikes, and Bitcoin plummeted to $73,000

According to Woofun AI, the unexpectedly strong performance of the US inflation data for October directly broke through the psychological defenses of the cryptocurrency market, causing the price of Bitcoin (BTC) to drop sharply to the $73,000 range, the lowest in nearly 3 months.

This sharp fluctuation is not an isolated catharsis of market sentiment; it is the result of a combination of sudden changes in macro-monetary policy expectations and a restructuring of risky asset valuations. As the probability of further tightening monetary policy by the Federal Reserve rises sharply, investors' willingness to allocate high-risk assets has cooled down significantly. Combined with the double squeeze formed by rising US Treasury yields and the strengthening of the US Dollar Index (DXY), the short-term downward pressure on BTC is being released at an accelerated pace.

Judging from specific market transaction data, the price drop triggered a chain deleveraging reaction. As of 8:06 a.m. on the 11th, the price of BTC on the South Korean digital asset trading platform Upbit fell 2.18% from 9:00 a.m. on the previous trading day to 102 million won; according to data from Binance, the world's leading exchange, BTC fell 2.02% within 24 hours, and the price was $73,590.

Meanwhile, mainstream altcoins generally surpassed BTC, Ethereum (ETH) fell 4.03% to $2,044, Ripple (XRP) fell 4.10% to $1.05, and some niche coins such as ZEC even plummeted 14% at one point.

According to Woofun AI on-chain data, the total amount of liquidations in the entire market reached US$7177.3 million in the past 24 hours, of which BTC holdings were liquidated about US$245.8 million, and up to 86.7% (or US$177.37 million) of long positions were forcibly closed, reflecting the characteristics of the market's panic sell-off after the inflation data was released. BTC hit an intraday low of $72,695 in the intraday period, and the cumulative decline since this year has widened to around 17%.

The core variable driving this round is that the October CPI data released by the US Bureau of Labor Statistics seriously deviated from market expectations. In the same month, CPI rose 0.4% month-on-month, exceeding market expectations of 0.3%; excluding food and energy, the core CPI rose 0.3% month-on-month, which was also higher than the 0.2% forecast. Increased inflationary stickiness fundamentally reversed financial market expectations for the Federal Reserve's December interest rate meeting, and it is widely predicted that the rate hike will rise from 25 basis points to 50 basis points. Federal Reserve Governor Christopher Waller publicly stated that if inflation continues to be strong, the Federal Reserve is fully capable of raising interest rates by 0.5 percentage points in December.

The combined effects of macro-financial indicators quickly became apparent: the yield on policy-sensitive 2-year US Treasury bonds soared 17 basis points to 4.73%, the biggest one-day increase in 19 months; the Bloomberg Dollar Spot Index rose 0.5%, underscoring the strong position of the US dollar. Jeff Anderson, head of STS Digital's US business, pointed out that the spread and sustainability of inflation exceeded expectations, and the December rate hike was raised from 25 basis points to 50 basis points, which dealt a heavy blow to the already weak risk asset investment mentality.

Despite the US regulatory environment being relatively friendly to digital assets and Wall Street infrastructure is improving, Binance's $6.3 billion hack last month continues to erode market confidence, making it difficult for BTC to rebound steadily amid macroeconomic headwinds.

Looking ahead to future trends, tightening macro-liquidity is still the core resistance to suppressing currency prices. Bitget analyst Louis Wong warned that rising interest rates on treasury bonds and a stronger dollar will further increase the selling pressure on BTC, and the 200-day moving average, which is currently around $73,200, has become a key technical support reference level. If the BTC price continues to run below this moving average, the market will face the risk of a deeper correction. Following the macro-austerity cycle, crypto assets once again experienced a systematic revaluation due to US inflation data exceeding expectations, indicating that the correlation between BTC and traditional macro factors did not weaken in the short term, but was further amplified during the liquidity-sensitive period.