Bitcoin price falls below $74,000 as hot US CPI fuels Fed rate hike fears

The pullback Crypto Economy described as instant hit the whole market, not just Bitcoin: major digital assets were dragged down once Bitcoin broke through key support levels. Leveraged traders face margin calls and forced unwinds, while spot holders watch for further downside before the Fed's next move. Portfolio managers now have to weigh December rate-hike odds alongside their crypto positions, something that was a marginal concern a year earlier.

Bitcoin trading roughly $32,000 below its year-ago level, even as inflation data moves markets, undercuts the pitch that it behaves as a hedge against the very price pressures now pushing it lower. Instead it is trading like a rate-sensitive risk asset, rising and falling on Fed expectations much like equities do. That is a genuine tension for anyone holding it as a store of value rather than a trade on monetary policy.

The Federal Reserve's December meeting is now the reference point traders are pricing against, with the hotter October CPI reading having already shifted rate-hike odds higher. A softer November inflation print before then would ease pressure on Bitcoin's current levels near $74,000; another hot number would harden expectations of a larger hike and likely extend the slide crypto.news tracked this week.

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Bitcoin fell 0.8% in the 4 hours after the first headline, after falling 0.6% in the 2 hours before.

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