- The crypto market took a nosedive, as roughly $1.04 billion in crypto positions were liquidated in 24 hours
- Out of that amount, around $538 million were long positions being wiped out in less than an hour
- Ethereum long traders had the biggest losses, with liquidations going over $177 million
The Producer Price Index (PPI) for July rose 0.9% month-over-month, marking its largest monthly gain since May 2022. Year-over-year, PPI climbed 3.3%, which is well above Wall Street’s forecast of approximately 2.5%.
Core PPI (excluding food, energy, and trade services) posted a 0.6% monthly gain and 2.8% year-over-year, its steepest rise since early 2022.
What a difference a day makes. This hot PPI report comes just two days after the CPI report came in cool. Here’s our analysis of that release.
These figures indicate a big inflationary pressure at the wholesale level, primarily fueled by the rise in service costs.
Shortly after the PPI report came out, the crypto market took a nosedive, as roughly $1.04 billion in crypto positions were liquidated in 24 hours. Out of that amount, around $538 million were long positions being wiped out in less than an hour.
Over 218,000 traders were affected, and Bitcoin, which reached an all-time high earlier today, slid to $118k and dragged altcoins down with it. Ethereum dropped by about 3%, while almost all the other cryptocurrencies did the same, with some faring even worse, like Dogecoin, with a drop of over 6%.
When it comes to traders, Ethereum long traders had the biggest losses, with liquidations going over $177 million. Bitcoin long traders lost approximately $113 million, while XRP and Solana saw losses of $44 million and $39 million, respectively.
The ever-present crypto volatility
Today’s quick drop in the market shows the delicate nature of the current rally, where high leverage and heightened expectations leave the market vulnerable to macroeconomic shocks. Some experts also pointed out that Bitcoin’s recent fast rise to a new record high had already made it likely to have a sharp pullback.
On the other hand, some traders view the current market correction as a necessary event to flush out excessive leverage, potentially setting the stage for future growth. Others are more cautious, though, warning that persistent inflationary pressures and uncertainty surrounding the Fed’s monetary policy could limit further gains in the cryptocurrency market for the foreseeable future.
On the positive side, long-term sentiment remains broadly bullish, with institutional inflows into spot Bitcoin ETFs going strong.
Still, today’s quick crash is a stark reminder that no rally is bulletproof, and that macro data has the power to pull the rug out from under even the strongest uptrend.
As we warned. This volatility shouldn’t be a surprise. Here was our full preview of the critical events to watch this week.
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