Bitcoin Trades Near $73K as US CPI Increased to 0.4% in October from its expectations of 0.3%

Bitcoin trades near $73,000 after October US inflation came in hotter than economists expected, adding fresh pressure to an already struggling cryptocurrency market. Ethereum also weakened, while traders increased bets that the Federal Reserve could raise interest rates at its December meeting.

The US Consumer Price Index (CPI) increased 0.4% month over month in October, beating expectations of 0.3%. Core CPI, which excludes food and energy, climbed 0.3% against forecasts of 0.2%. The figures strengthened concerns that inflation is not cooling quickly enough, potentially keeping financial conditions tighter for longer.

Bitcoin Trades Near $73,000 After Inflation Surprise

Bitcoin was trading near $74,300 shortly before the October CPI release. It quickly slipped to approximately $73,400 after the report, briefly falling below the $74,000 level.

Ethereum also weakened, trading around $2,100 as investors reassessed the outlook for interest rates.

The inflation report showed that food prices increased 0.5% during October, while energy prices climbed 0.7%. Shelter costs, another important component of inflation, rose 0.3%.

These increases matter for cryptocurrency markets because persistent inflation can reduce expectations for monetary easing. When interest rates remain high or rise further, investors may become less willing to hold volatile assets such as Bitcoin and Ethereum.

The latest decline also follows a difficult period for Bitcoin ETFs. As we reported in our coverage of Bitcoin ETF outflows reaching $1.28 billion, institutional fund demand has weakened, adding another source of pressure to the market.

Fed Rate Hike Bets Increase After Hot CPI

The October inflation figures have strengthened expectations for a Federal Reserve rate increase in December.

According to Reuters, futures markets now price in virtually a 100% probability of a rate increase at the December 8–9 meeting. Most of that probability is concentrated on a 25-basis-point increase, although expectations for a larger 50-basis-point move have also increased to nearly 15%.

Federal Reserve Governor Christopher Waller's recent comments have added to the concerns. He indicated that a 50-basis-point increase should be considered if inflation came in hotter than expected.

The latest core CPI reading of 0.3% met the threshold Waller had highlighted.

For crypto investors, the concern is straightforward. Higher interest rates can make traditional financial instruments more attractive relative to assets that do not generate interest income. They can also strengthen the US dollar and reduce liquidity available for speculative investments.

Crypto Liquidations Add to Bitcoin's Selling Pressure

The CPI announcement arrived after an already significant liquidation event.

More than $1.15 billion in cryptocurrency positions were liquidated over a 24-hour period leading into November 10, including approximately $1.04 billion in long positions. Bitcoin and Ethereum traders accounted for a substantial portion of the losses.

Long positions are leveraged bets that prices will increase. When markets move sharply in the opposite direction, exchanges automatically close positions that no longer meet margin requirements.

These forced closures can intensify selling pressure, particularly when market sentiment is already weak.

The latest CPI release adds another challenge for traders who were hoping for a recovery. With Bitcoin struggling to remain above $74,000, market participants will be watching whether buyers step in around the recent lows or whether another wave of selling develops.

What Comes Next for Bitcoin and Ethereum?

The Federal Reserve's December meeting is now a major focus for cryptocurrency investors. Traders will continue monitoring upcoming inflation reports, employment figures and comments from policymakers for clues about the likely size of the next rate move.

The October CPI report does not guarantee that the Fed will raise rates by 50 basis points. However, it has made the possibility more relevant to market pricing.

For Bitcoin, holding above the recent $73,000 - $73,500 area could help limit further downside pressure. A sustained recovery would require stronger buying demand, particularly as ETF outflows and leveraged liquidations continue to influence market sentiment.

Ethereum and other altcoins could also remain vulnerable if investors continue moving away from riskier assets.

For now, the combination of sticky inflation, tighter monetary policy expectations and weak institutional demand is making a cryptocurrency market recovery more difficult.