Recent U.S. Producer Price Index data spurred a notable decline in the cryptocurrency market, resulting in over $1 billion in liquidated leveraged positions within a 24-hour period.
What Led to the Huge Liquidation Losses?
After Bitcoin surged to a peak of $123,500, the market shifted towards a risk-off sentiment, causing declines in major cryptocurrencies. Altcoins like Dogecoin faced significant losses, reflecting broader market volatility and fear of rising inflation.
Where Were the Major Liquidations?
Bybit saw the most substantial share of liquidations at $421.9 million, predominantly from leveraged long positions. Binance followed with $249.9 million. A highlighted single transaction loss at OKX reached $6.25 million in an ETH-USDT perpetual contract.
Impact of Macroeconomic Factors on the Crypto Market
Experts comment that fluctuations reflect a high sensitivity of crypto assets to macroeconomic conditions. Anticipated announcements from the Fed and forthcoming economic reports are expected to significantly influence market movements.
As September approaches, market participants are closely watching the Fed’s guidance and the economic landscape. While short-term fluctuations may continue, the underlying value in cryptocurrencies is expected to support resilience and long-term recovery.
