The crypto market is experiencing another downturn, attributed to several factors, including the recent spike in US inflation and mass liquidations of trader positions.
Current State of the Crypto Market
The crypto market continues to face pressure, dropping 3% over the last 24 hours, with total capitalization decreasing from $4.02 trillion to $3.88 trillion. Bitcoin prices fell below $115,000, raising concerns about further declines to $112,000.
Reasons Behind the Drop and Mass Liquidations
The decline in the crypto market is linked to high levels of liquidations across traders’ positions, amounting to nearly $600 million in the past 24 hours. This occurred amid rising core PPI inflation data in the US, which lowered expectations for a rate cut by the Federal Reserve. According to Coinglass, over 131,000 traders were liquidated within the day.
Forecasts and Key Support Levels
Analysts expect Bitcoin could drop over 20%, with a key support level at $112,000. Historical analysis shows that Bitcoin prices have previously experienced significant dips, causing additional unease among investors. Some experts believe current volatility may persist until the Fed's interest rate decision in September.
The crypto market is facing challenges stemming from economic conditions in the US and high volatility. Investors should stay alert to changes in market dynamics and monitor key support levels.
