Bitcoin falls to three-month low as hot CPI lifts Fed hike bets

Bitcoin slid to its lowest level since August on Tuesday, trading near $73,000 after a hotter than expected US inflation report pushed traders to bet the Federal Reserve will raise interest rates in December.

US consumer prices rose 0.4 percent in October, the Bureau of Labor Statistics said on November 10. Economists had forecast 0.3 percent. Bitcoin (BTC) fell below $73,000 at 16:46 UTC that day, a fresh cycle low, according to CoinDesk's live market coverage.

That is the weakest the coin has traded since August 20. The drop was not isolated. Gold slipped too. US stocks fell with it, the Nasdaq Composite closing down 1.51 percent, the S&P 500 down 0.94 percent and the Dow off 0.61 percent. Bitcoin had already dropped below $74,000 overnight as about $1 billion in bets were liquidated, a move BTC Newz reported earlier.

What the inflation report showed

October's reading came in above the 0.3 percent monthly rise economists expected. Core prices, which strip out food and energy, rose 0.3 percent, a third straight month at that pace. Energy climbed 0.7 percent. Food rose 0.5 percent. Shelter, the largest single component, added 0.3 percent.

One number was missing. BLS did not publish the usual year over year figure for all items. A lapse in federal funding meant no price data were collected in October 2025, so the agency has no base month to compare against. Gasoline was the lone exception, with a published 12 month change of 37.4 percent.

Three straight 0.3 percent core prints carry more weight than any single month. They tell the Fed that inflation is sticky, not fading. Prices are still climbing faster than the 2 percent pace the central bank aims for. That is the opposite of what policymakers want to see before they ease, and it is why the October figure landed so hard.

Why the Fed now looks set to raise rates

Before the report, futures markets put the odds of the Fed holding rates steady in December above 30 percent. After it, those odds fell to zero, CoinDesk reported. Not in a week. In a day. Markets now price a quarter point increase at the December 9 meeting, which would lift the target range to 4.00 to 4.25 percent.

Fed Governor Christopher Waller had set the tone a day earlier. Waller said he favored a December increase even if inflation cooled, and that a hotter reading could justify a half point move. The CME FedWatch tool, cited by CoinDesk, showed an 85 percent chance of a quarter point hike and a 15 percent chance of a half point.

Not everyone buys the hawkish case. Quinn Thompson of Lekker Capital argued that Waller's tone likely marks the peak of inflation worry, not the start of a new tightening cycle. His point is simple. Rate expectations tend to overshoot right before they turn.

A rate hike raises borrowing costs across the economy. It also tends to pull money toward cash and bonds and away from assets that pay no yield, which is part of why bitcoin and gold often fall together when hike bets climb. The 10 year Treasury yield pushed above 5 percent during Tuesday's session.

How crypto markets reacted

Bitcoin spent the session tracking Wall Street almost tick for tick. It traded near $74,000 at 12:35 UTC, slipped to $73,600 an hour later, then briefly recovered above $74,000 before the afternoon leg down, according to CoinDesk. At its worst around 16:00 UTC the coin was off about 3 percent on the day.

Traders who bet on higher prices with borrowed money were hit hardest. About $723.37 million in crypto positions were liquidated over 24 hours, roughly $570 million of it from long bets, according to CoinGlass data cited by crypto.news. Nearly 115,600 traders were wiped out. Bitcoin alone accounted for $203 million of the forced selling.

Larger alternative tokens fell further than bitcoin. Ether (ETH), XRP and Solana (SOL) were each down close to 6 percent at the depths of the move. The pattern was familiar. When bitcoin drops, smaller coins usually drop more.

Spot bitcoin funds have been losing money all month. US spot bitcoin ETFs lost about $1.28 billion in the first trading week of November, almost all of it from BlackRock's IBIT, and another $201 million flowed out on November 9, according to Farside data cited by crypto.news. Outflows like these remove a steady source of demand.

Large holders have been trimming too. On chain tracker data cited by analyst Ali Martinez showed bitcoin's biggest wallets cut their holdings by more than 34,000 BTC in the prior week, worth about $2.6 billion. That figure reflects balances moving, not confirmed exchange sales, so it is a signal of intent rather than proof of selling. Ether's largest wallets shed about 17,800 ETH over the same stretch.

How long the pressure lasts is not clear. Neither the Fed nor any official has confirmed a December move. The decision comes on December 9. Until then, every inflation and jobs report will move the odds.

What to watch

The December 9 Fed meeting is the main event. A quarter point hike is now the base case, though the size is not fixed, and a surprise hold would likely lift risk assets fast. Watch the next round of jobs and inflation data for anything that shifts the bet. A single soft report could flip the odds again, the way this one hardened them.

ETF flows are the second signal to track. A return of net inflows would show institutional buyers stepping back in, while more outflows would point the other way. Bitcoin has spent 2026 moving on macro data more than on any crypto specific news, and that link shows no sign of breaking.