Bitcoin registered an intraday low of $79,730 before recovering to around $82,000 on Thursday as surging US wholesale inflation intensified a cryptocurrency selloff that triggered nearly $940 million in liquidations.
According to CoinGlass, 176,506 traders were liquidated during the period, totaling $939.24 million. The largest single liquidation occurred on Binance, where traders closed a BTC-USDT position worth $12 million.
Inflation data complicates rate-hike expectations
The selling followed a Labor Department report showing US producer prices jumped 1.3% in September, the biggest monthly increase since March 2022. Annual wholesale inflation accelerated to 6.3%, its highest level in nearly four years.
Core producer prices, excluding food and energy, rose 0.7% against expectations of 0.3%, taking the annual rate to 5%. The figures followed Wednesday's consumer inflation reading of 3.7%, indicating that price pressures were spreading beyond the energy market.
Energy prices surged 10.8% in September, raising transportation, manufacturing and distribution expenses. Ricky Ho, chief investment officer of a single-family office, warned that businesses must either absorb those increases through lower profit margins or pass them on to customers, potentially prolonging inflation and forcing the Fed to maintain restrictive monetary policy.
Despite the inflation surprise, the benchmark 10-year US Treasury yield fell to around 5.06% as investors moved into government bonds amid a deepening technology-stock selloff. Mohamed El-Erian, chief economic adviser at Allianz, attributed the decline partly to investors seeking safety and concerns about the resilience of technology investment, a key driver of US economic growth.
Futures markets briefly priced in nearly a 50% chance of an October rate hike after Wednesday's consumer inflation report. However, those expectations retreated despite Thursday's producer-price surprise, with the probability falling below 30%.
Can-Luca Köymen, investment strategist at Swiss-regulated digital-asset bank Sygnum, said the latest numbers nevertheless strengthened the case for additional tightening, noting that the core PPI reading confirms the CPI signal and a October 28 rate hike moves from a tail to a live risk.
Options traders shift to bearish positioning
The growing uncertainty has prompted cryptocurrency options traders to abandon bullish positions and increase protection against further declines.
According to Nick Forster, founder of options platform Derive, the implied probability of Bitcoin falling below $80,000 by Friday's expiry nearly doubled to 18.4% from 9.5% over the previous 24 hours. Meanwhile, the probability of Bitcoin reaching $100,000 by Christmas fell to 9.7% from 12.5%.
The repositioning accelerated after Wednesday's consumer inflation report, with Derive recording $129 million in Bitcoin and Ethereum options trading volume in the three hours after the release, up twelvefold from the preceding three hours.
One trader spent $151,000 purchasing a Bitcoin put spread covering 500 BTC, representing approximately $41 million in underlying exposure. The position could generate a maximum net profit of $849,000 if Bitcoin falls below $78,000 by Friday morning.
Major options expirations ahead
Attention has focused on Bitcoin's $80,000 support level ahead of two major options expirations. Friday's expiry involves approximately $1.3 billion in positions, with substantial put exposure concentrated between $76,000 and $80,000, according to Mauricio Di Bartolomeo, co-founder of Bitcoin lending platform Ledn.
A larger event arrives October 30, when roughly 140,000 BTC in options contracts, worth nearly $12 billion, are scheduled to expire. That represents approximately one-third of outstanding Bitcoin options positions on Deribit.
A significant concentration of around 25,000 BTC in call options sits at the $95,000 strike, potentially creating hedging-related demand if Bitcoin recovers toward those levels. The month-end options book also carries a maximum-pain level near $78,000, placing a substantial concentration of derivatives positioning below Bitcoin's current price.
