The Producer Price Index (PPI) data from the U.S. for July showed a sharp increase, triggering instability in the cryptocurrency market.
Market Overview
The global crypto market capitalization fell to $4.03 trillion, down 1.83% over the past 24 hours. Meanwhile, trading volumes surged 11.35% to $260.47 billion. Bitcoin slipped 0.67% to $119,744, although it remains 2.84% higher over the past week. Ethereum dropped 1.89% to $4,626, still up over 20% in the last seven days.
Market Liquidations
Recent inflation shocks triggered significant volatility, resulting in $931.06 million in liquidations over the past day. Long positions bore the brunt, accounting for $674.19 million of the total, compared to $256.87 million in shorts. In the past hour alone, $456.12 million was liquidated, including $439.71 million in longs.
Investor Outlook
The stronger PPI print adds uncertainty to the macroeconomic backdrop, potentially complicating the Federal Reserve’s path to rate cuts. A prolonged period of high interest rates could dampen speculative appetite in the crypto markets, though some traders view dips as buying opportunities given the sector’s strong performance in recent weeks. If inflation pressures persist, market volatility is likely to remain elevated — with Bitcoin and Ethereum both having posted strong multi-week gains, profit-taking could intensify before the next major catalyst emerges.
The situation in the cryptocurrency market remains tense amid rising inflation and high volatility, making forecasts extremely challenging.
