The October US consumer inflation report delivered an unpleasant surprise to the market: price growth came in noticeably above the consensus forecast, triggering an instant wave of forced position closures on the crypto market. In the first five minutes after the data release, exchanges liquidated leveraged positions worth roughly $200 million.
According to Bureau of Labor Statistics (BLS) data, consumer prices rose 0.4% in October against a Wall Street forecast of 0.23%. Core inflation, which excludes food and energy, has held at 0.3% for the third consecutive month. It was this data that became the trigger for sharp volatility: bitcoin (BTC) and gold fell in tandem.
Bitcoin and Gold Reaction
In the first five minutes after the report was released at 16:30 Moscow time, the BTC rate on Binance fluctuated in a range from $73,525 to $74,770. By the end of that interval, the price had dropped to about $73,709 (around 0.9%), and by 16:36 Moscow time the coin was trading around $73,918.
Longs — bets on price increases opened with borrowed funds — were hit hardest. Within five minutes of the release, exchanges forcibly closed such positions worth approximately $200 million: as losses mounted, traders' collateral was no longer sufficient.
Spot gold fell 0.6% over the same period — to about $4,048 per ounce, with some quotes dropping to $4,040. By 16:36 Moscow time, the precious metal remained in the same range.
Why the Market Reacted So Sharply
This reaction is explained by Fed policy. By raising rates, the regulator curbs inflation but at the same time makes cash and bonds more attractive — and they compete for investor money with assets that generate no interest income, gold and bitcoin. Investors had already priced in an 84% probability of a Fed rate hike in December.
At the same time, $1.28 billion flowed out of bitcoin ETFs amid growing expectations of a December move by the regulator. In October, the Fed kept its key rate in the 3.75–4% range, and Chair Kevin Warsh linked the tightening of financial conditions to demand generated by AI.
Additional pressure came from producer price data published on Friday: economists forecast that the Fed's preferred core personal consumption expenditures (PCE) index will come in at 0.23% for October. Without an annual figure, the series of 0.3% core readings remains the main inflation benchmark for the Fed ahead of the December meeting.
Cryptalist Analysis: The market has once again demonstrated hypersensitivity to macroeconomic surprises: inflation exceeding the forecast by just 0.17 percentage points triggered a cascade of $200 million in liquidations. This signals that the market is overloaded with leveraged longs and highly vulnerable to negative news. Bitcoin's resilience above $73,000 while gold declined simultaneously points to continued structural demand, but volatility will remain high until the December Fed meeting.