Bitcoin broke below $80,000 on Thursday for the first time in more than a month, extending Wednesday's inflation-driven slide and wiping out nearly $1 billion in leveraged crypto bets. After several hours of heightened volatility, the leading cryptocurrency was last trading around $82,000, still down 2.6% and below a key support level after hotter-than-expected U.S. inflation data revived bets on another Federal Reserve rate hike.

Roughly 177,440 traders were liquidated across the market in 24 hours, for a combined $948.22 million, according to CoinGlass. Long positions absorbed the overwhelming share, accounting for $858.96 million, or 90.6%, of the total. Ethereum led all assets with $282.03 million in liquidations, with Bitcoin just behind at slightly more than $200 million.

It was the third-heaviest day for long liquidations in the past 90 days, behind only October 8 and August 22. The single largest order force-closed was a $12.03 million Bitcoin long on Binance, liquidated at $80,208.96.

The selloff swept across the broader market. Ethereum and XRP each dropped close to 5%, Zcash sank almost 10%, and only five coins among the top 100 posted gains above 1% — effectively the entire large-cap field was in the red.

A liquidation occurs when a trader borrows funds to bet on a price move and the market goes the other way. Once losses eat through a position's collateral, the exchange sells it automatically, and that forced selling drags prices lower, tripping the next batch of leveraged longs.

Inflation Data Revives Rate-Hike Bets

The trigger was Wednesday's inflation report, which showed U.S. consumer prices up 3.7% year over year in September against a 3.6% forecast, with core inflation at 2.6% versus an expected 2.5%. Thursday's Producer Price Index, which tracks business input costs, delivered an even larger miss, rising 6.3% annually against a 5.5% estimate.

Much of that price pressure traces back to oil. Brent crude, the international oil benchmark, traded near $104 a barrel, roughly 70% above its level a year ago, amid the war between the U.S. and Iran — a cost that feeds into fuel, shipping, and almost everything that must be transported to reach consumers.\nHot inflation pushes the Federal Reserve toward higher interest rates, lifting Treasury yields, the return investors earn for lending to the U.S. government. A bond paying around 5% with virtually no risk makes Bitcoin a harder sell, while costlier borrowing and a stronger dollar drain the cheap liquidity leveraged crypto traders depend on.

Iliya Kalchev, an analyst at Nexo, read the selloff as a broad exit from risk rather than purely a Fed story, noting that stocks and copper were falling, gold was rising, and South Korea's Kospi, the country's benchmark stock index, was down about 8%.

"Bitcoin has slipped to the bottom of the $81,000 to $87,000 range it has held since late September, and Glassnode flags $80,000 as the level to watch," Kalchev told Decrypt. "It is also now roughly 2% below the average cost of U.S. spot ETF holders, near $82,300, after closing above that line on 21 of the 24 days since September 21. That puts ETF buyers back underwater, and reclaiming it is the first test of any rebound."

Key Levels on the Chart

On the daily chart, Bitcoin broke below $81,603, the strongest upper support from its August-to-October rally from $62,763 to $87,422, a zone where uptrend pullbacks have often stalled. The drop reached $79,711 before buyers pulled the price back to about $80,925, with a rising trend band near $80,286 providing a floor.

The Relative Strength Index, a 0-to-100 momentum gauge where 50 separates bulls from bears, fell to about 44, while the golden cross — a pattern that forms when a short-term moving average, typically the 50-day, crosses above a long-term one, typically the 200-day — still keeps the longer-term uptrend intact.

A daily close back above $81,603 would reopen the path toward $84,245 and the $87,422 swing high. Losing $80,286, meanwhile, would expose $78,002 as the next support, followed by $75,092.

What a Recovery Would Require

Kalchev sees early signs that selling is not deepening, including cooling profit-taking, but said a recovery needs more than a bounce.

"Three things need to line up for Bitcoin to push through. ETF flows have to turn consistently positive, after $681 million of outflows last week and a single $177 million inflow day. Selling by long-term holders has to ease," Kalchev explained.

U.S. spot Bitcoin ETFs hold the asset directly and report their inflows and outflows each trading day, figures widely tracked as a gauge of institutional participation in the market.

For Kalchev, a sustained bullish market would require that leverage be backed by consistent buying rather than a brief rebound. He added that a "Fed path that stops at one 25 basis point hike would take some pressure off the backdrop."

The Fed announces its next rate decision on October 28, followed by core PCE inflation data, the central bank's preferred price gauge, the next day and October payrolls on November 6.