Bitcoin traded near $73,500 on Tuesday morning, down about 1% over the past 24 hours and roughly $32,000 below where it stood one year ago, after a hotter-than-expected U.S. inflation report revived fears that the Federal Reserve could deliver a larger interest rate hike, according to Bitcoin Magazine Pro data.

The consumer price index rose 0.4% in October, above the 0.3% gain economists had expected. Core CPI, which strips out food and energy, climbed 0.3% against forecasts for a 0.2% increase. It is one of the most closely watched releases on the economic calendar, and surprises against forecasts tend to reset expectations for Fed policy almost immediately.

Bitcoin had been holding near $74,300 in the minutes before the 8:30 a.m. ET release. It dropped to about $73,400 immediately after the print, briefly undercutting Monday's overnight low of $73,477, before steadying in the high-$73,000 range.

JUST IN: U.S. CPI inflation comes in at 0.4% MoM, higher than expectations Bitcoin falls below $74,000 on the news. pic.twitter.com/Zxq3LtVwAd
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Inside the October inflation print

The monthly breakdown showed increases across every major category. Food prices jumped 0.5%, energy rose 0.7%, and gasoline gained 1.0%. Housing costs increased 0.3%.

The report did not carry an annual inflation rate. The record 43-day government shutdown in October 2025 kept the Bureau of Labor Statistics from collecting a full set of prices, leaving no comparable year-over-year figure — the reference point traders and policymakers normally use to gauge inflation's trajectory. Ahead of the release, Bank of America estimated that annual rates were running near 3.8% for headline inflation and 2.7% for core, both well above the Fed's 2% long-run inflation goal.

Fed hike bets build

Bond traders moved first. Two- to five-year Treasury yields rose at least 10 basis points on the day after the print, and traders boosted bets on a half-point hike when the Fed holds its final scheduled meeting of the year on Dec. 9. Moves of that size are unusual; the central bank has typically adjusted rates in quarter-point steps outside periods of acute inflation pressure.

That was the scenario Fed Governor Christopher Waller had laid out hours earlier. He said he was "leaning toward" a December increase and would back "more robust action" if inflation ran hotter than expected.

"In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting," Waller said. "Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take."

Before the data, markets had already largely priced in a quarter-point move. Higher rates raise the cost of holding an asset that pays no yield, a dynamic that has capped the bitcoin price since Friday's strong jobs report.

Elsewhere in markets

Bitcoin had already been soft overnight, losing about 1.4% from midnight UTC before the data, even as Asian markets rallied. South Korea's Kospi jumped 4.39% and Japan's Nikkei 225 rose 2.87%, while oil kept falling after President Donald Trump called fresh strikes on Iran "highly unlikely."

Stock futures were mixed going into the release. Dow futures rose 156 points, or 0.3%, while Nasdaq-100 futures slipped 0.4% after Monday's rally gave the S&P 500 its best day since April 8.

Commodities slipped as well. West Texas Intermediate crude traded near $84 a barrel, its lowest since late August, and gold fell just over 1% to below $4,100 an ounce.

ETF outflows leave bitcoin exposed

Fund demand has not cushioned the drop. U.S. spot bitcoin ETFs shed $201 million on Monday, led by $213.2 million leaving BlackRock's iShares Bitcoin Trust (IBIT), the fund's seventh straight session of redemptions. Spot ETF flows are widely tracked as a real-time gauge of institutional demand for bitcoin. The streak comes even as BlackRock says demand to swap coins into IBIT in kind — a creation process in which investors deliver bitcoin directly rather than cash — is at a record.

Bitcoin has drifted lower since peaking above $87,000 in early October as AI-related jitters weighed on Wall Street and ETF buyers stepped back.

Ether fell about 1.4% to near $2,100 overnight, while U.S. spot ether ETFs lost $184.6 million on Monday.

Key levels and what comes next

Analysts flagged $73,000 as the line to watch. A daily close below it could open the way to $70,000, while reclaiming $80,000 would point to stronger demand.

Producer price data lands Friday, followed by minutes from the Fed's October meeting on Nov. 18. Both releases will help decide whether traders hold onto bets for a half-point hike or pare them back ahead of the Dec. 9 decision.

At the time of writing, the bitcoin price traded near $73,500.

This article first appeared on Bitcoin Magazine and is written by Micah Zimmerman. Original article: Bitcoin Price Trades Down Near $73,500 After Hot CPI Print Lifts Fed Hike Bets.