Bitcoin Tumbles as U.S. Inflation Report Sparks Market Sell-off - Here’s What Happened

Inflation data drops. Bitcoin tanks. Another day in the crypto casino.

The Trigger

Fresh U.S. inflation numbers hit the tape, hotter than Wall Street expected. The immediate reaction? A classic risk-off pivot. Traders dumped speculative assets faster than you can say 'quantitative tightening.' Bitcoin, the digital bellwether, caught the full force of the sell-off.

The Domino Effect

It wasn't just Bitcoin. The entire crypto complex felt the heat. Major altcoins followed the leader down, painting charts a uniform shade of red. Liquidation engines fired up across derivatives platforms, amplifying the downward move. A stark reminder that in today's macro-driven market, crypto still dances to the Fed's tune.

The Silver Lining?

For the true believers, this is just noise. Volatility is the price of admission for an asset class rewriting the rules of finance. Every shakeout weakens the hands of short-term speculators and strengthens the foundation for the next leg up. The underlying thesis—digital scarcity in an era of currency debasement—remains untouched by a single economic report.

So, a bad day for portfolios, but perhaps a healthy one for the market's long-term structure. Just remember: on Wall Street, they call this 'price discovery.' In crypto, we call it Tuesday.

Bitcoin$91,237‘s price fell below $90,000 after the U.S. market opened, awaiting the release of the PCE report at lower levels. The PCE, a key inflation indicator for the Fed, is released with some delay. With a Fed meeting scheduled for the coming week, short-term investors likely engaged in panic selling shortly after the market opened. Additionally, the Michigan reports have just been released.

U.S. Inflation Update

The September PCE report was initially unavailable due to a government shutdown. Now, the delayed report covers the inflation status two months ago, and does not reflect the current situation. Nevertheless, investors reduced their risks in anticipation of unexpected data, causing losses of up to 7% in altcoins.

• U.S. September PCE Announced: 2.8% (Expectation: 2.8% Previous: 2.7%)
• U.S. September Core PCE Announced: 2.8% (Expectation: 2.8% Previous: 2.9%)

Although consensus estimates were lower, some analysts expected PCE to rise as high as 3.1%. However, the figures aligned with the consensus estimates.

Despite reaching the highest level since February 2025, the PCE remaining below 3% is positive. Additionally, it’s favorable that inflation has remained restrained below this level for a considerable time. Today’s figures confirm that inflation is under control, with employment being the main concern. The Michigan 5-year inflation expectation came in below forecast, and the 1-year predictions were also low.