Crypto Liquidations Top $1B After Surprise U.S. PPI Inflation Jump
- U.S. Producer Price Index (PPI) rose 0.9% in July – the sharpest monthly gain since 2022, and 3.3% year over year, the fastest since February.
- Over $1 billion in crypto positions were liquidated in 24 hours, with $782 million in longs wiped out as Bitcoin and ETH fell on the news.
A hotter-than-expected U.S. inflation reading sparked over $1 billion in crypto liquidations Thursday, rattling leveraged traders and weighing on major tokens.
The Producer Price Index (PPI) surged 0.9% month over month and 3.3% year over year in July, far above the ~2.5% expected. The data – the strongest annual increase since February, renewed concerns about inflationary pressures and potential shifts in the Federal Reserve’s policy outlook.
Bitcoin (BTC) dropped more than 2%, while Ethereum (ETH) slipped around 2.6% following the release. Data from CoinGlass showed $1.04 billion in positions liquidated within 24 hours, including $782 million in longs. The largest single wipeout was a $6.25 million ETH/USDT position on Bybit.
While the spike in PPI could complicate the Fed’s rate-cut path, markets still expect a September rate cut – with CME FedWatch data showing odds at 92%, slightly down from 94% earlier this week.
Leverage remains elevated across the market. Open interest in altcoins hit a record $47 billion, heightening the risk of sharp swings in both directions. With mixed inflation signals and upcoming key economic reports, including next week’s jobs data and the FOMC meeting minutes, analysts expect heightened volatility in the near term.
