Bitcoin declined to approximately $80,200 during Asian trading hours, marking a monthly low as the cryptocurrency faced pressure from multiple macroeconomic headwinds.
The selloff followed significant weakness in Asian equity markets. Japan's Nikkei 225 fell roughly 6% in the past 24 hours, declining from 68,375 to 64,130 before recovering slightly to 64,685. South Korea's KOSPI performed worse, tumbling to 5,550 and declining over 18.5% in the past five days and nearly 8% in the last 24 hours alone.
September consumer price index data released yesterday came in slightly higher than expected, intensifying macro pressure on risk assets. Following the announcement, Bitcoin's price dropped by over $1,000, while market odds of an October Federal Reserve rate hike jumped from approximately 20%-25% to 50%. The next FOMC meeting is scheduled for two weeks away.
Raymond James Chief Economist Eugenio Aleman noted that the inflation data suggests "inflation is broadening out, something that is not a good omen for the Fed and would raise the probability for an increase in rates at the end of the October FOMC meeting."
Bitcoin spot ETF flows shifted sharply negative following the CPI announcement. Daily flows moved from $175.62 million in the green on Tuesday to $261.46 million in the red after the data release, adding selling pressure to the market.
The broader cryptocurrency market experienced significant liquidations. Over $960 million worth of leveraged positions were wiped out daily, with $883 million from long positions. Ethereum accounted for $290 million of the total liquidations as it declined toward $2,300.
