Bitcoin and crypto market slide as elevated US inflation sparks $700 million in liquidations

• Bitcoin retreats towards $73,000 as October US inflation rises 0.4%, exceeding the 0.3% forecast.
• Further declines in Ethereum, XRP and Solana accompany $716 million in crypto liquidations.
• A close below Bitcoin's $73,000 support could pave the way for a decline towards $68,000, Wintermute warns.

Renewed concerns over the Federal Reserve's (Fed) interest rate outlook weigh on Bitcoin (BTC), which retreats towards $73,000 on Tuesday after October's US Consumer Price Index (CPI) report showed inflation above expectations.

What does October's above-forecast US inflation mean for markets?

October's monthly increase in US consumer prices came in at 0.4%, against economists' forecast of 0.3%, data from the Bureau of Labor Statistics (BLS) showed. Despite exceeding expectations, the rise was slower than September's 0.6%.

Underlying inflationary pressures showed no sign of easing, with core CPI rising 0.3%, matching September's pace and exceeding the 0.2% forecast. The core measure excludes volatile food and energy prices.

The usual annual inflation figures were not released by the BLS, as the previous year's government shutdown had prevented the collection of data for October 2025.

With inflation running higher, the Fed faces pressure to retain a restrictive policy stance, an environment that has historically been less supportive of risk assets.

Selling pressure returned across cryptocurrencies after the inflation release. Bitcoin slipped below $73,000 and Ethereum (ETH) fell 5% to $2,029, while losses in BNB, XRP and Solana (SOL) stood at 2%, 4.3% and 5.3%, respectively.

Coinglass data showed that the sell-off triggered $716 million in futures liquidations over the past 24 hours. Long positions accounted for the bulk of these, at $589 million.

US equities also moved lower, extending the market reaction beyond cryptocurrencies. At the time of writing, the 10-Year Treasury Note Yield had climbed above 5%, while the S&P 500, Nasdaq Composite and Dow Jones Industrial Average were down 0.94%, 1.51% and 0.61%, respectively.

Could a break below Bitcoin's $73K support open the way to $68K?

Bitcoin's strengthening correlation with traditional financial markets was highlighted earlier by Wintermute in its Tuesday market update. According to the firm, Bitcoin reached $81,000 last Wednesday amid falling oil prices and an equity rally, only to give up those gains by Friday when both markets changed direction.

At $73,000, Bitcoin's 200-day moving average marks a key support level, the trading firm also noted.

Wintermute wrote: “A daily close below it and the 200-day opens $68K, and we would expect the altcoins that rallied hardest after mid-September to take the brunt of that move, as they had the least basis to be up,”

A seven-week stretch above Bitcoin's 50-week moving average ended when its weekly close slipped below that level, at approximately $75,500.

As long as Bitcoin remains below its 50-week average, Wintermute said its outlook remains cautious. A sustained daily close above $80,000, together with a return of inflows into spot Bitcoin exchange-traded funds (ETFs), would be required for the firm to adopt a constructive view. Last week, these products saw net outflows of $1.28 billion, the largest weekly withdrawal since June.