Bitcoin swung from $76,000 to above $79,000 on Friday after August's headline US inflation print matched forecasts, but a hotter core reading pushed Federal Reserve rate-hike odds to 85% and drove bond yields to a 22-year high. The volatility triggered $684 million in leveraged liquidations across crypto exchanges in 24 hours, and CoinShares reported $243 million exiting digital asset products for the week.
Bitcoin plunged to $76,000 after Friday's US Consumer Price Index release, then reversed to reclaim $79,000, up more than 3% on the day. The move echoed US equities, which also turned green after a weak start to the session.
Core inflation surprise lifts rate-hike odds
Core CPI, which excludes food and energy, rose 0.3% month-over-month, above the 0.2% forecast. Headline inflation came in at 3.4% year-over-year. Traders responded by pushing the odds of a Federal Reserve rate hike at the Sept. 16 meeting to 85%, up from 60% a week earlier.
The 30-year Treasury yield briefly touched its highest level since June 2004 before easing to 5.309%. Trading firm QCP Capital warned the surge undercuts the rally that carried Bitcoin from $63,000 to $82,000 in August. According to QCP Capital: "This is the worst mix for Bitcoin".
Short sellers absorb most of a $684 million liquidation wave
Over $684 million in leveraged positions was wiped out across exchanges in 24 hours. Short sellers absorbed $422 million versus $261 million from longs. Bitcoin alone accounted for about $182 million of the total as the asset traded near $77,000.
Digital asset funds swing to outflows
CoinShares reported $243 million in net outflows from digital asset products in the week after the CPI release. That reversed $1.3 billion in inflows from the prior week. CoinShares concluded Bitcoin's path of least resistance may remain sideways or lower until the economic data shifts in a more accommodative direction.
Sources: Cointelegraph, Crypto Briefing, Crypto Briefing
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