Bitcoin risks another leverage shakeout if US CPI runs hot, analysts warn

Bitcoin has remained exposed to another inflation-driven selloff, analysts have warned, after an $811 million crypto liquidation wave left market-wide open interest down only about 2% at $140.9 billion in their pre-CPI assessment.

Ryan Lee, chief analyst at Bitget Research, warned in comments shared with crypto.news that the latest forced selling may have removed some vulnerable Bitcoin positions without fully clearing the leverage that could fuel another decline.

In the accompanying briefing, Bitget Research cited CoinGlass data showing $811 million in crypto liquidations during the 24 hours to Tuesday morning, with long positions accounting for most losses. The subsequent 24-hour total had eased to $140 million, while open interest remained at $140.9 billion.

“The latest liquidation wave has reduced leverage in Bitcoin, but it may not have fully reset market positioning.”

For Lee, elevated open interest after a selloff would suggest that substantial leveraged exposure remains ahead of the U.S. Consumer Price Index release. He warned that an inflation surprise could force another adjustment as traders reassess Treasury yields and Federal Reserve policy.

Bitcoin leverage could amplify an inflation surprise

With the briefing placing the 10-year yield around 5.20%, Lee identified hotter-than-expected inflation as a possible trigger for another round of liquidations. His warning was conditional on the data and the amount of leverage still in place.

Lee also said the earlier liquidation wave may have cleared some of the positions most exposed to falling prices, potentially limiting subsequent selling pressure.

On the other side of the release, he said softer inflation could produce a sharp rebound if traders rebuild risk exposure and short positions come under pressure. His assessment therefore leaves room for forced position closures to accelerate a move in either direction.

A similar two-way scenario appeared in Oct. 12 coverage of Bitcoin’s CPI price scenarios, when BTSE Chief Operating Officer Jeff Mei said unexpectedly strong inflation could push Bitcoin below $80,000. A softer reading, Mei said, could support a recovery toward $86,000 or higher.

Core inflation could challenge expectations for a Fed pause

Lacie Zhang, research lead at Bitget Wallet, identified persistent core inflation as the risk investors may be underestimating, particularly if energy spillovers, tariffs or sustained demand keep price pressures elevated.

In her pre-release assessment, Zhang put the probability of an October Fed hold near 77%. She warned that a hotter core reading or renewed pressure on Treasury yields could force a sharper repricing than markets currently anticipate.

According to Zhang, investors still largely expect one additional rate increase later this year, but persistent inflation could keep the Fed on a higher-for-longer path beyond that assumption.

Her forecast ranges placed headline CPI at approximately 0.5%–0.6% month-on-month and 3.6%–3.7% year-on-year. For core inflation, she cited expectations near 0.2% monthly and 2.4%–2.5% annually.

Pointing to consumer demand, Zhang cited retail sales excluding autos and gasoline rising 0.28% month-on-month and 4.05% year-on-year. She also referenced New York Fed President John Williams’ indication that further increases may not be necessary in 2027.

For U.S. investors holding Bitcoin through spot ETFs, Bitfinex analysts had already connected inflation readings to the December policy outlook. In an Oct. 6 report on slowing Bitcoin ETF buying, the team said softer core inflation would weaken the case for another increase, while firm spending and persistent core inflation would strengthen it.

ETF buying has recovered faster than on-chain demand

Nicolai Sondergaard, senior research analyst at Nansen, described a recovery in Bitcoin ETF demand that has yet to receive clear support from the firm’s on-chain trading sample.

According to Sondergaard, Bitcoin ETFs attracted $175.7 million on Oct. 13, following $678.9 million in withdrawals during Oct. 5–9 and another $65.4 million outflow on Oct. 12.

The earlier selling included a large withdrawal from U.S.-listed funds. An Oct. 8 report documented Bitcoin ETF withdrawals of $484.9 million on Oct. 7, citing Farside Investors data. BlackRock’s IBIT lost $207.7 million, Fidelity’s FBTC shed $105.1 million, and ARK 21Shares’ ARKB recorded $101.7 million in redemptions.

Within Nansen’s latest Smart Trader sample, Sondergaard reported approximately $555,000 in Solana inflows and $22,000 in Ethereum inflows over 24 hours. Across seven days, however, both remained in net outflow.

For Bitcoin-linked wallets, he described mixed flows without a clear sign of widespread accumulation.

“ETF demand is recovering faster than on-chain conviction.”

Ahead of CPI, Sondergaard characterized the activity as “some selective positioning,” rather than a market-wide expression of confidence. He put annual consensus expectations at 3.6% for headline inflation and 2.5% for core CPI.

Bitcoin bulls need buying support above $84,500

In Zhang’s pre-CPI market assessment, Bitcoin traded around $83,400–$83,500, with initial support at $81,000–$82,000 and another downside reference near the recent $80,400 low.

Above that range, she placed resistance at $84,000–$84,500, followed by $85,000–$87,000. Zhang said bulls would regain clearer control through a sustained move above $84,500–$85,000 on solid trading volume, supported by renewed inflows.

For that bullish scenario, Zhang also wanted core inflation at or below approximately 0.2% month-on-month and easing expectations for further rate increases. Alongside the inflation reading, she identified December Fed expectations, ETF flows, and continued institutional accumulation as the main factors to monitor.