Bitcoin slipped below $74,000 on Tuesday, touching its weakest level in 11 weeks after hotter-than-expected US inflation data strengthened the dollar and raised expectations of a larger Federal Reserve rate rise. The largest cryptocurrency was changing hands at $73,703 at about 8:45 a.m. Eastern time, down 1.3% on the day and 3.5% over the week. Early on Wednesday it was trading near $73,695.

TradingView data showed bitcoin dipping to $72,815, nearly matching Sunday's low and its weakest level since 21 August. The slide followed a brief post-election recovery that failed to hold, leaving traders watching whether the $73,500 area can act as support.

Liquidations mount as leveraged longs unwind

Derivatives markets took the brunt of the move. Coinglass data showed 80,898 traders were liquidated over 24 hours, generating $356.16 million in forced closures, with long positions absorbing $280.40 million against $75.77 million in shorts. Ethereum accounted for $117.61 million of liquidations, followed by bitcoin at $86.14 million and Solana at $23.45 million. The largest single liquidation was a $14.31 million bitcoin long on Hyperliquid, and Binance accounted for 42.6% of liquidations across the exchanges tracked.

Bitfinex analysts said the earlier advance had depended more on derivatives positioning than on genuine spot buying, warning that a market held up by perpetual longs rather than spot bids tends to break levels in cascades rather than grind through them. They expect bitcoin to stay within a $72,350 to $79,400 range implied by options expiring on 13 November, trading towards the lower half, and see $75,900 to $77,500 as a potential selling zone.

Hot CPI data drives the sell-off

The trigger was the October consumer price index, which rose 0.4% month on month against a 0.3% forecast, while core inflation rose 0.3% against a 0.2% forecast. Shelter accounted for over 30% of the monthly increase, rising 0.3%, food rose 0.5% and energy advanced 0.7%. Fed Governor Christopher Waller had said hours earlier that a core reading of 0.3% would prompt him to consider a half-point December rate rise. Before the release, traders put a 96.3% chance on a quarter-point rise; afterwards the odds shifted to 88.5% for a quarter point and 11.5% for a half point.

Options traders remain heavily positioned, with 240,193 bitcoin in outstanding call contracts against 186,945 in puts, although recent trading has tilted modestly towards downside instruments. The 13 November $74,000 put leads Deribit trading volume, and the December expiry carries almost $11 billion in notional value. For now, the market's focus is on Fed signals and whether bitcoin can hold above $73,500.