US Inflation Cooled, So Why Did Bitcoin and Stocks Sell Off?
Despite cooler-than-expected US inflation data, Bitcoin and stocks sold off sharply due to structural factors like market positioning and liquidation cascades.Summary
US inflation data showed headline CPI slowing to 2.7% year-over-year and core CPI at 2.6%, both below forecasts, which initially caused Bitcoin to spike toward $89,000 and the S&P 500 to rise. However, this rally quickly reversed, with Bitcoin sliding toward $85,000 and equities erasing gains, puzzling many traders.
The analysis points to structural market dynamics rather than macro fundamentals. Bitcoin's taker sell volume data showed large, aggressive selling spikes precisely when the price broke lower, coinciding with US trading hours. This behavior is consistent with liquidation cascades and algorithmic de-risking in highly leveraged markets.
The 'good news' of softer inflation likely triggered the selloff by briefly improving liquidity, allowing large players to execute size efficiently. This ran into dense resting orders and leveraged positions, causing a reversal that triggered long liquidations, which amplified the downside move. While the charts show patterns associated with stop-runs, the underlying cause is likely systematic strategies by large funds managing risk, not narrative manipulation. The cooled inflation remains fundamentally supportive, but the market experienced a short-term positioning reset.
(Source：BeInCrypto)