Bitcoin (BTC) and broader cryptocurrency markets faced renewed selling pressure in mid-October 2026 after US inflation data came in hotter than anticipated, reviving concerns that the Federal Reserve could raise interest rates again at its late-month meeting.
September’s Consumer Price Index rose 0.6 percent month-over-month and 3.7 percent year-over-year, exceeding the 3.6 percent consensus forecast, according to the Bureau of Labor Statistics.
Core CPI, which excludes food and energy, rose 0.3 percent month-over-month and 2.6 percent annually, above the 2.5 percent expectation.
Gasoline prices surged 9.1 percent in the month and accounted for more than half of the headline increase, lifting energy costs sharply.
The figures, released on October 14, marked the final major inflation reading before the Fed’s October 27–28 gathering.
Market pricing for an October rate hike rose substantially from prior levels near 22 percent, with some measures placing odds closer to the mid-40s or higher, as Treasury yields climbed and the dollar firmed.
Higher-for-longer rate expectations typically weigh on non-yielding assets such as Bitcoin, and the cryptocurrency initially fell about 1.5–2 percent, trading near or below $82,000 before extending losses.
Risk-off sentiment quickly spilled into Asian equity markets the following day. South Korea’s Kospi benchmark plunged approximately 8 percent, triggering circuit breakers and a temporary trading halt on both the main board and the Kosdaq.
The index fell to around 5,527–5,554, its sharpest single-session drop in months and part of a multi-session slide that had already erased substantial market value.
Heavy losses in semiconductor heavyweights Samsung Electronics and SK Hynix—each down roughly 9–11 percent at points—drove the decline, reflecting broader concerns over artificial intelligence infrastructure spending, debt loads, and the impact of higher US yields.
Foreign investors continued net selling, and the rout echoed weakness in other regional tech-linked indices.
Sticky US inflation and AI-related caution reinforced a defensive stance across risk assets. Bitcoin’s price subsequently broke below $81,000 during Asian trading hours on October 15, amplifying the global risk-off move.
The decline coincided with nearly $1 billion in cryptocurrency futures liquidations over a 24-hour window, according to derivatives data trackers.
Ethereum absorbed a disproportionate share of the forced closures—often exceeding Bitcoin’s absolute total despite its smaller market capitalization—while XRP and other major tokens also saw meaningful long-position wipeouts.
Bitcoin fell about 3 percent toward the $80,600–$81,300 range in the latest leg lower, while Ethereum dropped more sharply.
The liquidation cascade reflected elevated leverage and thin liquidity, as leveraged longs were stopped out amid the macro-driven selloff.
On-chain analytics firm Glassnode highlighted structural constraints even as some selling pressure eased. In its mid-October Week On-chain report and related commentary, the firm noted that Bitcoin remains capped near the roughly $88,000 average cost basis of holders who acquired coins six to twelve months earlier.
Buyers from the prior one-to-two-year period sit closer to a $100,000 cost basis. Both levels have previously rejected rallies this year.
At the same time, long-term holders’ realized losses have declined substantially from mid-August peaks, and price has repeatedly found support near the US spot ETF cost basis around $81,500.
Glassnode observed that until Bitcoin sustains a close above the $88,000 zone, overhead supply from near-break-even holders continues to limit upside, even as loss-taking among longer-term holders has cooled.
The pressure spilled over into Bitcoin mining equities, which fell more sharply than the underlying cryptocurrency.
The CoinShares Bitcoin Mining and Digital Power ETF declined more than 10 percent in a single session, while individual names with significant AI infrastructure exposure—such as IREN, Cipher, and Hut 8—dropped in the double digits.
Nvidia-backed AI cloud provider CoreWeave also plunged sharply.
The moves coincided with a Gartner assessment warning that more than 80 percent of specialized “neocloud” providers may cease operating independently by 2030 amid cost pressures, raising questions about the sustainability of debt-financed AI data-center expansions that many miners have pursued.
Higher yields increase borrowing costs for these capital-intensive pivots, prompting investors to reassess valuations that had previously re-rated on AI narratives.
Against the near-term turbulence, Bitwise Chief Investment Officer Matt Hougan offered a longer-term perspective in his October 14 weekly memo. Hougan argued that nearly every plausible macroeconomic path ultimately supports higher Bitcoin prices.
An AI-driven productivity boom could raise the relative value of scarce assets; an AI-related downturn or recession would likely prompt monetary easing and fiscal support that historically benefits hard assets; and a moderate-growth soft landing would allow continued ETF inflows, institutional adoption, and treasury allocations.
In Hougan’s framing, “all roads still lead to Bitcoin,” whether through excess money creation relative to real growth, a scarcity premium in a highly productive economy, or steady share gains amid stable conditions.
He acknowledged that short-term volatility remains possible, but the multi-scenario outlook reduces the importance of any single macro outcome for long-term holders.
Taken together, these developments show a market caught between sticky inflation that keeps rate-hike risks alive, concentrated equity stress in AI-exposed sectors, and elevated derivatives leverage, while on-chain data and longer-horizon analysis point to persistent structural support and potential resilience for Bitcoin.