The October CPI data released by the United States last night was in line with expectations. The market therefore expects that the Federal Reserve will most likely continue to cut interest rates by 25 basis points in December. Bitcoin continued to rise in response to this, breaking through the $93,000 mark at one point.

Data released by the U.S. Department of Labor last night (13) showed that the U.S. CPI (Consumer Price Index) in October rose 2.6% from the same period last year and rose slightly by 0.2% from September this year. Both were in line with previous expectations.

At the same time, the core CPI, excluding food and energy, remained the same as in September at 3.3%, with an annual increase of 3.3%, both in line with market expectations.

The probability of a rate cut in December rose to 82.3%

Previously, due to Trump's victory in the US election, the market expected that Trump's economic policies after taking office might lead to a slowdown in the pace of interest rate cuts by the US Federal Reserve (Fed).

However, after the release of the October CPI, according to the CME Fed Watch tool, the market believes that the probability of the Fed cutting interest rates by 1 basis point in December has risen from 58.7% the previous day to the current 82.3%, and the probability of maintaining interest rates at the 4.75% to 5% range has dropped to 17.7%.

Image source: CME Fed Watch tool

Bitcoin briefly surpasses $93,000

With the release of CPI data, expectations of further interest rate cuts in December were reinforced. Bitcoin once again gained momentum last night, breaking through the $93,000 mark at 00:15 today (14), reaching a high of $93,263.

However, selling pressure emerged afterwards, and the price even fell back to US$88,000 earlier, trapping many users who chased the rise after seeing the new high.

According to Coinglass data, in the past 24 hours, the total amount of cryptocurrency liquidation on the entire network reached US$847 million, with long positions liquidated at US$520 million and short positions liquidated at US$326 million. More than 250,000 people were liquidated, which can be said to be a double kill of long and short positions.

Bitwise Investment Director: $500,000 is a sign of Bitcoin’s maturity

Many investors are afraid of the current crazy rise of Bitcoin, and are worried that liquidation will come at any time. However, Bitwise Chief Investment Officer Matt Hougan recently said that it is still in the early stages of Bitcoin value discovery, and we can only call Bitcoin mature when it reaches $500,000:

Bitcoin has recently hit record highs several times with the positive sentiment brought about by Trump's victory, and a breakthrough of $100,000 is imminent.

Demand for Bitcoin as a gold-like store of value asset will continue to increase, especially against the backdrop of widening government deficits.

Although central banks currently hold about 20% of the world's gold reserves, Bitcoin holds less than 2%. If the US government plans to build a Bitcoin reserve, Bitcoin will achieve the $500,000 goal and be on par with gold in the value storage market.

However, CryptoQuant founder Ki Young Ju also recently reminded investors that although Bitcoin will continue to rise in the long run, the current market leverage ratio of Bitcoin in the U-standard has reached a historical high of 2.7. If liquidation comes, it will probably be unimaginable pain.

US stocks mixed

However, although the U.S. stock market was also stimulated by short-term factors, subsequent selling pressure emerged. The performance of the four major indexes after opening last night was as follows:

  • The Dow Jones Industrial Average rose 47.21 points, or 0.11%, to close at 43,958.19.

  • The S&P 500 index rose 1.39 points, or 0.02%, to close at 5,985.38.

  • The Nasdaq index fell 50.66 points, or 0.26%, to close at 19,230.74.

  • The Philadelphia Semiconductor Index fell 102.34 points, or 2.00%, to close at 5006.29 points.

In terms of individual stocks, Meta, Nvidia, Alphabet and other seven giants in the U.S. stock market also saw slight declines.