Key takeaways
- Bitcoin briefly drops below $83,000 before inflation data
- Spot Bitcoin ETFs lose $773 million across four sessions
- Traders watch $80,000 support as Fed uncertainty persists
Bitcoin slipped below $83,000 on October 13 as investors reduced exposure to riskier assets ahead of Wednesday's U.S. Consumer Price Index (CPI) report, with persistent ETF withdrawals adding pressure to the cryptocurrency market.
BTC briefly traded below $81,000 overnight before recovering above $83,000. The latest volatility follows several days of weak institutional demand and elevated U.S. Treasury yields, leaving traders uncertain whether Bitcoin can sustain its rebound.
Although the inflation report has not yet been released, expectations surrounding Federal Reserve policy are already influencing market positioning.
Bitcoin ETF Outflows Reach $773 Million as Demand Weakens
U.S. spot Bitcoin exchange-traded funds recorded approximately $773.3 million in net withdrawals across four trading sessions from October 7 through October 12, according to Farside Investors.
The heaviest selling occurred on October 7, when investors withdrew $484.9 million. Another $244.1 million exited the following day, followed by a modest $21.1 million inflow on October 9 and renewed withdrawals of $65.4 million on October 12.
BlackRock's iShares Bitcoin Trust (IBIT) alone recorded approximately $207.7 million in outflows on October 7, demonstrating that even the largest Bitcoin investment vehicles were affected.
The selling coincided with a broader Bitcoin liquidation wave, which saw approximately $771 million in cryptocurrency positions liquidated over 24 hours.
However, ETF withdrawals and liquidations measure different market activities and do not independently establish what triggered the latest price decline.
Why Wednesday's U.S. CPI Report Matters for Bitcoin
The Bureau of Labor Statistics will publish September inflation figures on October 14 at 8:30 a.m. Eastern Time.
August's CPI increased 3.4% year over year, remaining above the Federal Reserve's 2% inflation target.
Higher-than-expected September inflation could strengthen expectations for restrictive monetary policy, potentially pushing Treasury yields higher and weakening demand for non-yielding assets such as Bitcoin.
The relationship has already influenced Bitcoin price movements, particularly as rising oil prices and bond yields have tightened financial conditions.
Conversely, softer inflation could ease pressure on yields and improve investor appetite for cryptocurrencies.