TL;DR
- In the past 24 hours, more than $1 billion in leveraged crypto positions have been liquidated following a sharp market reversal triggered by higher-than-expected U.S. inflation data.
- Bitcoin touched a new all-time high above $123,500 before losing momentum.
- Analysts remain optimistic, highlighting that strong fundamentals, increasing institutional participation, and expanding global regulatory clarity could support a market recovery in the coming weeks.
After an explosive rally that pushed Bitcoin to unprecedented levels, crypto markets faced an abrupt pullback as traders reacted to the latest U.S. Producer Price Index report. The hotter-than-expected inflation figures raised concerns about delayed Federal Reserve rate cuts, prompting a swift unwinding of risk across major cryptocurrencies worldwide.
Long positions suffered the heaviest damage, with over $866 million erased compared to just $140 million in shorts. Ether traders absorbed the largest hit, with $348.9 million liquidated, followed by Bitcoin at $177.1 million. Solana, XRP, and Dogecoin experienced respective liquidations of $64.2 million, $58.8 million, and $35.8 million.
Bybit saw the largest share of losses, totaling $421.9 million, with Binance and OKX following at $249.9 million and $125.1 million. The biggest single liquidation was an ETH-USDT perpetual swap worth $6.25 million on OKX.
Macroeconomic Pressure Meets Market Euphoria
The sell-off came shortly after Bitcoin hit a record high above $123,500, fueled by renewed institutional interest, global liquidity inflows, and optimism over blockchain adoption. However, the inflation data added short-term turbulence, revealing how closely crypto markets are now intertwined with macroeconomic trends and overall investor sentiment worldwide.
Industry experts note that despite the pullback, sentiment remains constructive. The current correction is being interpreted by some as a natural cooling phase after an overextended rally, potentially setting the stage for healthier price action, stronger accumulation phases, and new entry points for long-term investors.
Analysts Expect Long-Term Bullish Momentum
Jeff Mei, COO at BTSE, remarked that markets may consolidate until clearer policy guidance emerges from the Fed, while Nick Ruck of LVRG Research emphasized that the underlying drivers of this cycle—decentralization, institutional inflows, and technological progress—remain intact and strong.
With traders now eyeing upcoming U.S. labor market data in early September, expectations are that any hint of policy easing could reignite bullish momentum. Many in the sector view this week’s events not as the end of the rally, but as a reminder of crypto’s resilience in adapting to broader economic forces, global capital shifts, and evolving investor behavior patterns worldwide.
