After the release of US inflation data, crypto liquidations reached 562 million dollars. Bitcoin dropped to 76651 dollars, while long positions bore most of the losses. In Brief BTC price sli
After the release of US inflation data, crypto liquidations reached 562 million dollars. Bitcoin dropped to 76651 dollars, while long positions bore most of the losses.
Bitcoin was trading between 78,000 and 79,000 dollars before the release of the US Producer Price Index. This announcement quickly pushed its price below 77,000 dollars. BTC then recorded a daily low on Bitstamp at 76,651 dollars.
Afterward, the crypto rebounded. However, it showed a decline of over 2.5%, with a valuation close to 1.55 trillion dollars. This drop triggered the closure of multiple leveraged positions.
Liquidation breakdown reveals that bullish investors suffered the heaviest losses :
Short sellers on bitcoin lost nearly 8 million dollars. The ratio of long to short liquidations is thus about fourteen to one for this asset. Such an imbalance confirms that the market was mainly positioned for a rebound before the drop.
Liquidation can occur when the platform immediately closes a position that has become insufficiently collateralized. Thus, leverage amplifies losses triggered by a relatively limited price fluctuation.
This move followed the release of the Producer Price Index, or PPI. Such an indicator measures the progress of prices received by US producers. It can then signal future price pressures for consumers.
According to the US Bureau of Labor Statistics, the PPI increased by 0.4% in August compared to July. This monthly rise matched economists’ forecasts. It thus does not represent a surprise by itself, unlike what the immediate market reaction implies.
However, the annual rate rose to 5.4%, up from 4.8% in July. Additionally, prices increased by 1.1%, while services prices accelerated by 0.1%. Energy costs jumped 4.2%, notably driven by a 24.1% surge in diesel prices.
These on-chain data reinforce the risk of another Federal Reserve rate hike. Thus, Carl Weinberg, chief economist at High Frequency Economics, said :
Start your crypto adventure safely with BybitThis link uses an affiliate program.This report reveals upcoming cost increases and will support members of the Committee who want to raise rates now.
Just after the release, Polymarket and Kalshi bettors assigned a 63% probability to a 25 basis point hike. This estimate gained nine points. The CME FedWatch then showed nearly 67%.
Later, futures raised this probability to about 70%. A rate hike usually boosts bond yields and reduces the appeal of risky assets. It can also support the dollar, putting additional pressure on bitcoin.
The yield on the US ten-year Treasury bond also exceeded 4.90%. Moreover, Treasury bond purchases did not prevent this rise. The Kobeissi Letter noted on the social network X: “this confrontation between authorities and the bond market prepares for a very turbulent fourth quarter”.
Now, the market watches the Consumer Price Index. This report could provide a second signal on inflation progression before the next Fed meeting.
A high figure would strengthen the rate hike scenario and keep bitcoin under pressure. Conversely, price slowdown would reduce these expectations. For now, BTC’s ability to defend the $76,500 to $77,000 zone remains the main technical indicator to monitor.
