US inflation has surprised negatively the most in several months. However, instead of the market recovering continuously, both Bitcoin and US stocks have sharply declined during US trading hours.
This price movement has raised doubts among traders, but upon examining the charts, a familiar explanation rooted in market structure, position placing, and liquidity emerges rather than macroeconomic fundamentals
What happened after the U.S. released the CPI
The CPI per capita rate decreased to 2.7% year-over-year in November, significantly below the forecast of 3.1%, including Core CPI also lower than the forecast of 2.6%
On paper, this is one of the most risk-friendly inflation number announcements of 2025, with the market initially reacting as it should, with Bitcoin soaring close to 89,000 USD, while the S&P 500 also surged shortly after the data was released
But that buying power could not hold its ground
Within about 30 minutes after the CPI announcement, Bitcoin reversed sharply after reaching a daily high near 89,200 USD, followed by heavy selling, plunging close to the 85,000 USD zone
The S&P 500 followed suit in a similar manner, swinging up and down in a single day to nearly erase the positive gains from the CPI before the market stabilized again
The simultaneous reversal of the crypto market and stock market is significant because it indicates that this movement did not occur with any particular asset or stem from market sentiment, but is a structural characteristic
The selling volume of Bitcoin Taker indicates the overall picture
The clearest signal is in the taker sell volume data of Bitcoin
On the daily chart, there was a large spike in taker sell volume immediately after Bitcoin fell below support. Taker selling reflects market orders aggressively selling into the bid side, indicating proactive selling rather than intentional profit-taking
These increases are concentrated during U.S. market hours and coincide with periods of the fastest price declines
The weekly overview confirms this pattern, with similar sudden selling levels repeating several times over the past week, often occurring during high liquidity, indicating forced selling or systematic repeats rather than just isolated exits by retail investors
This behavior aligns with liquidation cascade events, volatility control strategies, and algorithmic risk reduction, all of which accelerate when prices start to move against leveraged positions
CPI report did not trigger selling pressure due to bad data, but caused volatility because the data came out favorable
The temporary reduction in inflation helps increase liquidity and tighten price spreads, creating an environment conducive for large players to trade large volumes effectively
The initial surge in Bitcoin's price likely collided with resting buy orders, placing stop losses and short-term leverage. When the upward momentum halted, the price reversed, leading to the closure of long positions and triggering stop-outs
When forced selling occurs from liquidation, it exacerbates the price decline. This is why the price drops rapidly rather than gradually
The movement on the same day of the S&P 500 also exhibited a similar pattern, with both declines and rapid rebounds during important economic data often reflecting dealers' hedge mechanics, the effects of options gamma, and systematic liquidity adjustments in real-time
Does this look like price manipulation?
These graphs do not prove price intervention but instead show patterns often associated with stop-runs and liquidity pulls:
A rapid movement to clearly visible technical levels
Immediate reversal after liquidity improves
Severe sell-off during the price breakout
Close alignment with U.S. trading hours
These behaviors are considered normal in highly leveraged markets, as these driving factors typically do not come from ordinary individuals but arise from large funds, market makers, and systematic strategies operating across futures, options, and spot markets, with their focus not on controlling the narrative but on operational efficiency and risk management
In the crypto world where leverage remains high and liquidity disappears quickly outside of key periods, these cash flows may appear excessive
Meaning and future impact
This sell-off did not undermine the CPI signals; inflation is genuinely decreasing and remains beneficial for risk assets in the long term. However, what the market is facing is a reset of short-term investment positions, not a macro-level reversal
In the near term, traders will watch to see if Bitcoin can hold above the latest support and whether selling pressure will decrease once the liquidation is complete
If the taker sell volume decreases and the price stabilizes, CPI data may still influence the market in the next period
