Inflation Data Sparks $939 Million in Crypto Liquidations
Bitcoin fell below $80,000 on October 24 after US producer inflation surged to 6.3% annually, triggering $939.24 million in liquidations across 176,506 traders, according to CoinGlass data. The intraday low reached $79,730 before the asset recovered to $82,000.
The move followed a Labor Department report showing US producer prices jumped 1.3% in September, the largest monthly increase since March 2022. Core producer prices, excluding food and energy, rose 0.7% against expectations of 0.3%. Energy prices surged 10.8% in the same period, raising transportation, manufacturing, and distribution expenses across the economy.
The inflation surprise shifted Federal Reserve rate-hike expectations. Futures markets briefly priced in nearly 50% chance of an October rate hike after Wednesday’s consumer inflation report of 3.7%, but expectations retreated to below 30% following the producer data release.
Options Markets Repriced Rapidly
Can-Luca Köymen, investment strategist at Sygnum, said the core producer price reading confirmed inflation pressures. “0.7% core PPI confirms the CPI signal rather than fading it: a 28 October hike moves from a tail to a live risk,” Köymen stated.
Options markets repriced sharply. The implied probability of Bitcoin falling below $80,000 by Friday’s expiry jumped to 18.4% from 9.5% previously. The probability of Bitcoin reaching $100,000 by Christmas fell to 9.7% from 12.5%. Ethereum’s chances of exceeding $3,000 by Christmas dropped to 14%.
Options trading volume spiked to $129 million in the three hours after the consumer inflation release, a 12-fold increase from the preceding three hours. One trader spent $151,000 on a Bitcoin put spread covering 500 BTC with $41 million in underlying exposure, positioning for a maximum net profit of $849,000 if Bitcoin fell below $78,000 by Friday.
Large Liquidations and Expiry Positioning
The largest single liquidation occurred on Binance, where a BTC-USDT position liquidated for $12 million. Mauricio Di Bartolomeo, co-founder of lending platform Ledn, noted the mechanics of options expiry. “Whoever is short those calls has to buy as price moves toward them,” Di Bartolomeo said, describing the forced-buying dynamics as options approach their strikes.
Friday’s options expiry involved approximately $1.3 billion in positions with substantial put exposure concentrated between $76,000 and $80,000. A block sale included 1,293 ETH March 2027 call spreads.
The October 30 options expiry represents a larger event. Roughly 140,000 BTC in options contracts worth nearly $12 billion expire on that date, representing approximately one-third of outstanding Bitcoin options positions on Deribit. The maximum-pain level for the month-end options book sits near $78,000, according to options data.
The 10-year US Treasury yield fell to around 5.06% despite the inflation surprise as investors moved into government bonds amid a technology-stock selloff. The Federal Reserve is scheduled to meet October 27-28, with additional economic data and Fed Chair commentary expected to shape rate expectations through month-end.
