$700 million in liquidations as hot US inflation drives Bitcoin, crypto market lower

• 0.4% US inflation in October exceeded the 0.3% forecast. Bitcoin retreats towards $73,000 following the release.
• $716 million in crypto liquidations accompanied further declines in Ethereum, XRP and Solana.
• $68,000 could be Bitcoin's next downside level if it closes below $73,000 support, Wintermute warns.

$73,000 is in focus as Bitcoin (BTC) retreats on Tuesday. The move follows an above-forecast US Consumer Price Index (CPI) report for October, which revived concerns over the Federal Reserve's (Fed) interest rate outlook.

0.4% October US inflation tops forecasts

A 0.4% monthly rise in US consumer prices in October surpassed economists' 0.3% forecast, Bureau of Labor Statistics (BLS) data showed. Even so, inflation slowed from September's 0.6% increase.

Excluding volatile food and energy prices, core CPI rose 0.3% against expectations of 0.2%. That matched September's reading, indicating that underlying inflationary pressures have not yet eased.

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

With inflation higher, the Fed faces pressure to keep monetary policy restrictive, a backdrop that has historically been less favourable for risk assets.

Selling resumed across cryptocurrencies after the inflation release. Bitcoin slipped below $73,000 and Ethereum (ETH) lost 5% to $2,029. BNB, XRP and Solana (SOL) fell 2%, 4.3% and 5.3%, respectively.

According to Coinglass data, the sell-off forced $716 million in futures liquidations over the past 24 hours. Long positions accounted for the bulk, at $589 million.

US equities also fell as the market response spread beyond crypto. Losses reached 0.94% for the S&P 500 and 1.51% for the Nasdaq Composite. At the time of writing, the Dow Jones Industrial Average was down 0.61%, while the 10-Year Treasury Note Yield had climbed above 5%.

$68K downside risk for Bitcoin below $73K support

In an earlier Tuesday market update, Wintermute pointed to a strengthening correlation between Bitcoin and traditional financial markets. Bitcoin reached $81,000 last Wednesday as Oil fell and equities advanced, the firm noted. By Friday, those gains had been erased as both markets reversed direction.

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

“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,” Wintermute wrote.

A separate weekly signal saw Bitcoin close below its 50-week moving average, around $75,500, ending seven consecutive weeks above that level.

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