Bitcoin drops due to CPI distortion concerns, volatility increases ahead of 34 trillion won options expiration

Source: BlockMedia Original Title: [Market Update] Bitcoin Retreats Amid CPI Distortion Concerns… Facing $34 Trillion Options Expiry, Struggling to Hold $85,000 Original Link: U.S. Consumer Price Index(CPI) slowdown caused Bitcoin to briefly surpass $89,000, but it mostly gave back gains and fell below the support level of $85,000. Despite indicators favorable to risk assets, concerns over potential distortion in inflation data have led to renewed volatility across the digital asset market. Notably, Bitcoin is approaching options expiry for approximately $23 billion(about 34 trillion won), which could further increase short-term price volatility.

As of 8:40 a.m. on the 19th, Bitcoin(BTC) was traded at 127.38 million won, down 1.02% from 9 a.m. the previous day, on domestic digital asset exchange Upbit. On a major global exchange, it was recorded at $85,572, down 0.53%. At the same time, Solana(SOL) fell 2.79% to $119.72, and XRP(XRP) declined 2.55% to $1.81.

According to CoinGlass, approximately $182.75 million(about 2.698 billion won) worth of positions were liquidated in Bitcoin over the past 24 hours. Of these, about 63.62% were long(buy) positions. Overall, the digital asset market saw about $54.873 million(about 81.01 billion won) in liquidations.

The early rally was largely driven by a significantly softer-than-expected U.S. Consumer Price Index(CPI) for November. With the overall inflation rate dropping from 3% to 2.7%, the market quickly anticipated a potential rate cut by the Federal Reserve(Fed·Federal Reserve) in January.

Seema Shah(Seema Shah), Chief Strategist at Principal Asset Management, commented, “The decline in inflation in November provided strong justification for dovish(dovish) monetary policy within the Fed,” suggesting that the likelihood of a rate cut in response to rising unemployment has increased. Chicago Fed President Austan Goolsbee also described the data as “positive,” but emphasized the need for further confirmation.

However, debates over the reliability of inflation indicators have quickly dampened price expectations. Some economists pointed out that rent and owner’s equivalent rent(OER), which are part of the housing costs in October, were effectively treated as ‘0’ in the statistical calculations. If the U.S. Bureau of Labor Statistics(BLS) does not adjust for this, the year-over-year consumer price inflation rate could appear lower than actual until April next year.

Amid macroeconomic uncertainty, options markets are set for a major event on the 26th(local time), when about $34 trillion(roughly 50% of all open interest in digital asset options on Deribit)Deribit( will expire. This has led to expectations that volatility around the expiry could increase.

Nick Forster)Nick Forster(, founder of digital asset trading platform Dlive.xyz, stated, “The market is increasingly on a knife’s edge as the year-end approaches,” adding, “Prices are in a very unstable equilibrium.”

He further explained, “Investors’ current positions in Bitcoin are generally leaning bearish,” noting that “price volatility over the past 30 days has risen again to around 45%, and options markets are reflecting more hedging trades against downside than upside expectations.” He also added, “This trend suggests that additional downside risk is being priced into the market through the first and second quarters of next year.”

Even after expiry, volatility drivers remain. MSCI, the global index provider, is scheduled to announce index rebalancing decisions on the 15th of next month. There is speculation that companies holding more than 50% of their assets in digital assets could be excluded from major indices. Additionally, the re-expansion of call option selling strategies—bets on rising prices—could further increase volatility.

Maxime Seiler)Maxime Seiler(, CEO of STS Digital, commented, “This trend could both limit upward price movement and increase downward volatility.”

Meanwhile, the Alternative Fear·Greed)Fear·Greed( index, which measures investor sentiment in the digital asset market, rose slightly to 17 points from 16 the previous day. The index indicates that closer to 0 reflects strong selling pressure, while closer to 100 indicates strong buying sentiment.