Bitcoin fell below $82,000 overnight on October 13 amid a selloff in global stock markets. However, the world's largest cryptocurrency began recovering in the morning and climbed back above $83,000.
According to The Block, the Bitcoin price approached $81,000 on some exchanges before rebounding to around $83,500. Other major cryptocurrencies showed a similar pattern. Ethereum recovered after falling to a five-day low, while XRP turned higher after hitting its lowest level in three weeks.
The selloff triggered widespread liquidations across the crypto market. According to CoinGlass, traders saw $771 million in positions liquidated over 24 hours, including $685.6 million in long positions.
What caused the crash
One of the factors weighing on the crypto market was a sharp decline in South Korea's KOSPI stock index, which lost more than 6% on Tuesday. Shares of Samsung Electronics and SK Hynix plunged around 8% amid concerns over inflated AI company valuations and growing competition from Chinese chipmakers.
Negative sentiment also spread to the U.S. market. Nasdaq futures fell 0.6%, extending Monday's 0.78% decline in the tech-heavy index.
Weakening institutional demand added further pressure on cryptocurrencies. According to SoSoValue, investors withdrew $681.1 million from U.S. spot Bitcoin ETFs last week, marking the largest weekly outflow since late June. Ethereum ETFs lost another $542 million over the same period.
Investors await U.S. inflation data
Elevated oil prices remain another source of uncertainty. U.S. WTI crude is trading near $92.70 per barrel, while Brent is holding around $106. Higher oil prices increase inflation risks and raise the likelihood of tighter monetary policy from the U.S. Federal Reserve.
Investors are now focused on the release of the U.S. Consumer Price Index (CPI) report, scheduled for Thursday, October 15. The data could influence expectations for the Fed's next policy decisions and the performance of risk assets.
According to Paul Howard, senior director at market-making firm Wincent, large investors are more likely to hedge their positions using derivatives during periods of heightened volatility rather than exit cryptocurrencies entirely. This could help the market avoid a broader selloff.
As a reminder, Strategy purchased another 250 Bitcoin for $21.5 million.
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