Oil-Driven Inflation Fears Spark Bitcoin Price Drop, $500M in Liquidations

A sudden drop in Bitcoin's price below $83,000 triggered a chain reaction that wiped out approximately 129,197 traders and around $500 million in leveraged crypto bets in just one day.

The decline began on September 28 when President Donald Trump rejected Iran's proposal to reopen the Strait of Hormuz, causing Brent crude oil prices to climb 3.2% above $100 a barrel.

This increase in oil prices led to higher inflation expectations, prompting markets to price in an increased probability of a Federal Reserve rate hike in October, now estimated at 70.3%, up from 64.2% the previous day.

The resulting rise in yields had far-reaching effects on other assets, with gold plummeting by 3.4% on September 28, marking one of the rarest single-day declines since 2006, according to The Kobeissi Letter.

As Bitcoin's price fell below $83,000, altcoins such as QNT, ONDO, and NEAR experienced drops between 13% and 20%, while roughly $500 million in crypto positions were liquidated over 24 hours, hitting 129,197 traders.