Bitcoin Dips Below $80K as Liquidations Approach $1 Billion

Bitcoin briefly slipped under $80,000 on Thursday, a level it had not visited in more than a month, after hotter-than-expected U.S. inflation readings set off a wave of forced selling in crypto derivatives. CoinGlass data cited by Decrypt shows $948.22 million in positions were wiped out over 24 hours, hitting 177,440 traders. Leveraged longs made up $858.96 million of that, or 90.6%. Ether, not Bitcoin, took the largest share of the damage. Bitcoin later recovered to roughly the $81,000–$82,000 area.

Ether Takes the Biggest Hit

Ether liquidations came to about $282 million according to Decrypt, and roughly $286 million in an earlier CoinGlass snapshot reported by CoinDesk. That put ether ahead of Bitcoin, which saw approximately $197 million to $200 million liquidated. The order is notable because the ether futures market is the smaller one: CoinDesk puts open ether contracts at about $30 billion, against roughly $52 billion for Bitcoin. ETH itself fell more than 6% and traded near $2,350, according to CoinDesk.

Losses were spread across the market:

• XRP and SOL each dropped around 5%, and Solana futures saw about $31 million liquidated.
• Zcash was among the weakest large tokens. It fell between roughly 10% and 13% depending on the source, and close to $19 million in ZEC contracts were closed.
• Dogecoin slid about 6%.
• Decrypt counted only five top-100 coins that were up by more than 1%.

Decrypt reports this was the third-largest day for long liquidations over the past 90 days, behind only October 8 and August 22. The single biggest loss was a Bitcoin long worth $12.03 million at Binance, which was liquidated at $80,208.96.

Background: Inflation, Oil and the Fed

The trigger was U.S. economic data. Wednesday's consumer price report put September inflation at 3.7% year over year, above the 3.6% consensus. Core inflation came in at 2.6%, against an expected 2.5%. On Thursday, the Producer Price Index, which measures costs facing businesses, showed a 6.3% annual rise, well beyond the 5.5% estimate. Decrypt ties much of this pressure to energy. Brent crude is trading near $104 a barrel, about 70% higher than a year earlier, amid the U.S.-Iran war.

In general, stubborn inflation raises the odds of tighter Federal Reserve policy. Tighter policy tends to lift Treasury yields and the dollar. That makes a near-riskless government bond yielding about 5% a stronger competitor to Bitcoin, and it raises the cost of the borrowed money behind leveraged crypto trades.

Liquidations make these moves bigger. When a price move eats through a borrowing trader's collateral, the exchange closes the position automatically. CoinDesk gives an example: a trader who controls a $10,000 position with $1,000 can be wiped out by a move of less than 10%. Those automatic sales push prices lower and can set off the next layer of leveraged positions. CoinDesk also points out that liquidation totals show the size of the closed positions, not the cash traders actually lost.

Key Bitcoin Levels Under Watch

Nexo analyst Iliya Kalchev describes the drop as a wider retreat from risk rather than a purely Fed-driven event. He points to falling equities and copper, a stronger gold price, and a drop of about 8% in South Korea's Kospi. He noted that Bitcoin is now at the bottom of the $81,000–$87,000 band it has traded in since late September. It also sits about 2% below the roughly $82,300 average entry price of U.S. spot ETF investors. "That puts ETF buyers back underwater," he said.

On the chart, Bitcoin fell through $81,603, a support level from its August–October run from $62,763 to $87,422, and reached a low of $79,711. Decrypt's technical view has two paths. A daily close back above $81,603 could open the way to $84,245 and then $87,422. A break of $80,286 would bring $78,002 and then $75,092 into view. The RSI momentum gauge is near 44, but the golden cross still signals a longer-term uptrend.

What Comes Next

Kalchev sees early signs that selling is easing, including cooling profit-taking. He argues a real recovery needs ETF flows to stay positive; last week saw $681 million in outflows and only one inflow day, worth $177 million. Selling by long-term holders would also need to ease. He added that a Fed path limited to one 25 basis point hike would relieve some pressure. The next major events are the Fed decision on October 28, core PCE data the day after, and October payrolls on November 6.

Our assessment: this episode shows how much of the market's recent calm depended on leverage, especially in ether. The open question is whether inflation data cools enough to bring ETF buyers back before the $80,000 area is tested again.