Bitcoin (BTC) and Ethereum (ETH) took a hit after hotter-than-expected US inflation data. Ethereum fell 6.6%, Bitcoin dropped 3.8%, and traders saw $972.44 million in liquidations over 24 hours.
But Glassnode’s on-chain data tells a more mixed story: the short-term outlook looks shaky, yet the longer-term picture is showing signs of recovery.
US Inflation Exceeds Expectations
According to the US Bureau of Labor Statistics, the Consumer Price Index (CPI) rose 0.6% in September. Annual inflation reached 3.7%, up from 3.4% in August and above economists’ forecast of 3.6%.
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Core CPI, which excludes food and energy because their prices tend to swing a lot, rose 2.6% over the past year. That’s also above the expected 2.5%.
Gasoline was a big part of the story. Fuel prices jumped 9.1% in September and accounted for more than half of the monthly increase in consumer prices.
Fed Rate Hike Expectations Weigh on Crypto
The inflation reading has changed expectations for the Federal Reserve’s next move. The central bank raised interest rates in September to a range of 3.75% to 4.00%. According to CME FedWatch, the chance of another hike at the October 27–28 meeting has risen to 31.6%.
The wider market felt it too. The total crypto market value fell 2.7% to $2.83 trillion. .
$972 Million Wiped Out in Liquidations
The volatility also triggered liquidations of leveraged positions. These happen when traders fail to meet margin requirements and are forced to close their positions.
According to Coinglass, $972.44 million was liquidated over the last 24 hours, with $891.80 million of that coming from long positions. Bitcoin accounted for nearly $203 million of liquidated assets, while Ethereum saw $292.78 million.
Bitcoin Price: Key Technical and On-Chain Levels
Despite dipping to $80,500 on Thursday morning European time, Bitcoin has since recovered slightly to $80,800 and continues to hold near the $81,000 level. Coinglass data shows a weekly liquidation cluster currently forming near $80,000.
Meanwhile, Glassnode says Bitcoin is stuck under key cost basis levels. It’s caught between strong support around $80,000–$81,500 and heavy selling pressure near $88,000.
In the short term, Glassnode’s outlook is cautious:
- Spot Bitcoin ETFs have returned to net outflows.
- Inflation is running hotter than expected.
- Investors who bought at higher prices may sell as Bitcoin approaches their break-even levels.
On-Chain Recovery Signals
Under the surface, Glassnode sees signs of a potential market recovery, with loss-taking declining significantly and profitable holders now accounting for most spending.
Bitcoin has also never closed below its Realized Price during this bear market, suggesting a shallower downturn compared to previous cycles.
According to Glassnode, this suggests a shallower downturn than in previous cycles.
Key Levels to Watch
- $88K: A breakout could signal renewed strength, especially if ETF inflows return.
- $80K-$81.5K: This is the key support zone. A breakdown could trigger liquidations and push Bitcoin toward $78K.
- Macro risks: US inflation, the Federal Reserve’s next rate decision, and the US midterm elections could all drive volatility.
Why This Matters
Bitcoin’s longer-term structure shows signs of recovery, but a sustained rally still needs stronger buying demand. Until ETF inflows return and BTC breaks above $88K, Glassnode says the market remains vulnerable to further downside.
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