U.S. April CPI year-over-year 3.8%, exceeding expectations, Bitcoin temporarily fell below $80k, nearly 100k traders liquidated.

May 12, 2026, U.S. Bureau of Labor Statistics released data showing that the April CPI year-over-year increase rose to 3.8%, surpassing market expectations of 3.7% and hitting a new high since May 2023. The unexpected rise in inflation data quickly triggered a chain reaction in the risk asset markets. Bitcoin experienced selling pressure after the data release and briefly fell below the key psychological level of $80k in the early hours of the next day. The intense market volatility and forced liquidations swept through the derivatives market. According to CoinGlass data, the total global crypto market liquidations in the past 24 hours reached $277 million, with over 96k traders forcibly closed positions.

Why Did April CPI Subcategory Data Trigger Market Warnings?

This inflation data drew high market attention because the sub-indicators generally pointed to increased inflation stickiness. After seasonal adjustment, the U.S. CPI for April rose 0.6% month-over-month, with the year-over-year rate significantly expanding from 3.3% in March to 3.8%. Core CPI, excluding food and energy, increased 2.8% YoY, higher than the previous 2.6% and exceeding the market forecast of 2.7%. Looking at the subcategories, energy prices are the main driver of inflation. The energy index rose 3.8% month-over-month in April, contributing over 40% of the overall CPI increase for the month, with gasoline up 5.4% MoM; YoY, the energy index increased 17.9%, with gasoline up 28.4%. The housing index rose 0.6% MoM, with rent and owner’s equivalent rent both up 0.5%, indicating that core inflation remains resilient. This suggests that inflationary pressures are not limited to temporary factors but are showing broad-based expansion.

How Does Oil Price Transmission Impact Cryptocurrency Valuations?

The impact of energy inflation on crypto assets is not a direct linear transmission but operates indirectly through multiple channels. WTI crude oil prices hover around $101 per barrel, and sustained high oil prices in the short term increase production and transportation costs, heightening inflation expectations. When markets expect inflation to remain above policy targets, rising real interest rates tend to depress risk asset valuations. Additionally, higher oil prices and energy costs exert pressure on crypto mining and trading activities. For PoW networks relying on electricity costs, rising marginal costs can influence miners’ willingness to clear positions and their holding behaviors. However, the core market reaction is driven mainly by macroeconomic expectation shifts rather than deteriorating industry fundamentals.

The Jump in Rate Hike Probabilities and Its Transmission to Risk Assets

Following the CPI release, market pricing for Federal Reserve interest rate paths changed significantly. According to CME FedWatch data, the probability of a 25 basis point rate hike within the year jumped from about 21.5% to over 30% after the CPI report. The market generally expects the Fed to keep rates unchanged for the rest of the year, with a 97.6% chance of no change by June and about 70% by December. More importantly, the structure of the interest rate market shifted: traders in SOFR-linked options actively hedge against the risk of future rate hikes, with interest rate swap contracts indicating an approximately 85% chance of a 25 basis point increase before the June policy meeting. The rising probability of rate hikes signals a reversal of easing expectations and an extension of the high-rate environment, directly pressuring the discounted valuations of crypto assets that depend on ample liquidity.

Institutional Capital Outflows Confirm Macro Hedging Risks

The movement of institutional funds provides an important validation of macroeconomic expectation shifts. According to SoSoValue data, amid rising macro uncertainty, spot Bitcoin ETFs saw a net outflow of $277 million, breaking the previous five-day streak of inflows. Notably, all 10 spot Ethereum ETFs experienced a combined outflow of $104 million on the same day, indicating that this capital outflow is not isolated to a single sector but reflects a broader strategic retreat by institutional investors under macro pressure. This widespread withdrawal further confirms the market’s assessment—when inflation data exceeds expectations and rate hike expectations rise, risk asset allocations are significantly de-prioritized, and funds rapidly shift toward safe-haven assets.

How Do Derivatives Markets Price and Liquidate Macro Risks?

The pricing and liquidation mechanisms in derivatives markets are key to understanding this wave of liquidations. Before the CPI data release, the market’s long-short ratio was about 1.16, with long positions heavily concentrated around $80k, especially with 20 to 50x leverage. This structure made the market’s downside defense highly dependent on maintaining prices above this critical level. When CPI data pushed up rate hike expectations, the actual interest rate outlook increased, and Bitcoin’s non-yielding nature meant it bore greater valuation pressure under the rate hike environment. As stop-loss orders for long positions were triggered and forced liquidations occurred, prices were pushed lower, triggering more liquidations and creating a typical deleveraging negative feedback loop.

Nearly 100k Liquidations Expose Structural Fragility of Leverage Trading

The distribution of liquidation data reveals deep structural issues in the market. Over the past 24 hours, more than 107k investors worldwide faced forced liquidations, with the largest single liquidation reaching $2.71 million. Long positions dominated these liquidations, driven by the market’s expectation of peaking inflation and policy easing before the data proved otherwise, leading to a mass unwinding of contrarian positions. This event also illustrates a fundamental logic of derivatives trading: it’s not a symmetric game between longs and shorts, but rather the fragility of leverage structures that becomes exposed in extreme conditions. For market participants, understanding the underlying liquidation mechanisms of derivatives tools is more important than merely guessing price directions.

Summary

The U.S. April CPI rising to 3.8% YoY again indicates that inflation is far from over. High energy prices combined with rigid housing costs form the underlying logic for short-term inflation stubbornness. The interest rate market’s pricing has shifted from “when will rate cuts come” to “is a rate hike possible,” and this fundamental change in expectations imposes real valuation constraints on crypto markets. From capital flows, institutional caution is reflected in continuous ETF net outflows, while the concentrated liquidation of highly leveraged longs reveals the fragility of derivatives markets under macro shocks. The macro environment remains uncertain, and market participants should continue to monitor the upcoming May CPI data to be released on June 10 and the Federal Reserve’s next policy signals.

FAQ

What are the main reasons for the CPI data exceeding expectations in April?

The April CPI rose from 3.3% to 3.8% YoY, mainly driven by energy prices and housing costs. The energy index increased 17.9% YoY, with gasoline up 28.4%; housing index rose 0.6% MoM, with rent costs continuing upward. Core CPI increased 2.8% YoY, reaching a new high since September 2025, indicating inflation stickiness exceeding market expectations.

What is the core driver behind Bitcoin falling below $80,000?

The direct driver is the macro expectation shift triggered by CPI data. The higher-than-expected inflation eliminated the market’s expectation of rate cuts within the year, increased the probability of rate hikes, and extended the high-interest-rate environment, weakening risk asset valuations. As of May 13, 2026, Bitcoin briefly dipped below $80,000, with rapid market pricing of macro data being the core driver of this decline.

How large is the recent liquidation volume, and what does it reflect?

According to CoinGlass, over 96k investors were liquidated in the past 24 hours, with total liquidations reaching $277 million, mostly long positions. This reflects a structural issue of excessive leverage concentration before the CPI data release—when macro expectations reversed, leveraged long positions relying on high prices lacked buffers, and stop-loss triggers caused chain reactions.

What trend did institutional funds show during this decline?

Institutional funds showed a clear outflow trend. The spot Bitcoin ETF experienced a net outflow of $277 million, ending a five-day inflow streak; Ethereum ETFs also saw $104 million in outflows. This overall shrinkage indicates risk-averse behavior by institutions amid rising macro uncertainty.

What macro indicators should be watched next?

The upcoming May CPI data to be released on June 10 will be crucial for confirming inflation trends. Additionally, the new Fed Chair Kevin W. Waugh’s first policy statement will influence expectations for future rate paths. The geopolitical situation in the Middle East, especially the Strait of Hormuz, also warrants ongoing monitoring for its impact on oil prices and CPI transmission.