Over $1 Billion in Crypto Positions Liquidated After U.S. Inflation Spikes Trigger Market Reversal

In the past 24 hours, over $1 billion in leveraged crypto positions were liquidated following a sharp market reversal triggered by higher-than-expected U.S. inflation data [1]. The correction came after Bitcoin briefly touched a new all-time high above $123,500, before quickly retreating amid growing concerns about potential delays in Federal Reserve rate cuts [1]. The sell-off saw long positions suffer the most, with over $866 million in losses compared to just $140 million in short liquidations [1]. Ether traders bore the brunt of the losses, with $348.9 million wiped out, followed by Bitcoin at $177.1 million [1]. Solana, XRP, and Dogecoin also saw significant liquidations of $64.2 million, $58.8 million, and $35.8 million respectively [1].

The largest losses were recorded on the Bybit exchange, where $421.9 million in positions were liquidated, followed by Binance at $249.9 million and OKX at $125.1 million [1]. The biggest single liquidation was a $6.25 million ETH-USDT perpetual swap on OKX [1]. The sharp correction occurred against a backdrop of growing macroeconomic uncertainty, with the latest U.S. Producer Price Index report prompting a swift unwinding of risk across global crypto markets [1].

Despite the short-term turbulence, analysts remain optimistic about the long-term outlook for the market. Jeff Mei, COO at BTSE, suggested that markets may consolidate until clearer policy guidance emerges from the Fed [1]. Nick Ruck of LVRG Research highlighted that the fundamental drivers of the current bull cycle—such as decentralization, institutional inflows, and technological progress—remain strong and intact [1]. Many observers are now turning their attention to upcoming U.S. labor market data in early September, with expectations that any sign of policy easing could reignite bullish momentum [1].

The recent events underscore the increasing interconnectivity between crypto markets and broader macroeconomic conditions. The sharp correction, while painful for leveraged traders, is being interpreted by some as a natural pause in an overextended rally, potentially setting the stage for stronger accumulation and more sustainable price movements in the coming weeks [1]. For now, the market remains in a state of recalibration, with investors closely monitoring how global capital flows and investor behavior evolve in response to shifting monetary policy expectations [1].

Source: [1] From Record High to Rapid Crash: $1B in Crypto Positions Liquidated in 24 Hours (https://crypto-economy.com/from-record-high-to-rapid-crash-1b-in-crypto-positions-liquidated-in-24-hours/)