Bitcoin Surges to $85.6K on Inflation Data, but Rally Fades
Bitcoin's price briefly surged to $85,600 on Wednesday after the release of U.S. inflation data showed slower-than-expected price increases in August.
The rally was short-lived, with the price tumbling to $84,350 by 10:35 a.m. EST, leaving the cryptocurrency marginally higher just hours before September comes to a close.
The sharp price fluctuations triggered significant liquidations of leveraged positions in the derivatives market, with Coinglass data showing the liquidation of $55 million in short bets in four hours, compared with $27 million in long bets.
Despite the recent rate hike of 25 basis points, many analysts and prediction market bettors believe that the Federal Reserve will raise rates again, potentially capping the upside potential of risk assets like Bitcoin.