Bitcoin reached a new all-time high today, but has shed over $5,800 since the high. Here’s what could be fueling the correction.
There have been mixed reactions in the cryptocurrency market today, particularly with the massive price fluctuation seen with Bitcoin. Much earlier today, the crypto firstborn attained a new all-time high of $124,277. However, this has gone south quickly, with BTC correcting 4% from the high a few hours after.
Why the Quick Price Turnaround?
Notably, Bitcoin has lost $5,850 from its ATH today, dropping to $118,427 at the time of writing. This has seen it give back all its gains in the past two days, fueled by a series of macroeconomic and on-chain developments.
Meanwhile, a recently released economic indicator is also fueling this dump. The US producer price index (PPI) rose to 3.3%, which is higher than expected. For the uninitiated, this indicates that the price producers receive for their products has increased, signaling rising inflation.
While the core consumer price index (CPI) looked good, the high PPI raises concerns over the inflation situation in the United States. This is also a setback to the highly expected interest rate cut in September, with Polymarket showing a drop in the odds of the event happening.
Crypto Liquidation Spike Amid Bitcoin Downturn
Bitcoin’s massive correction has spurred a broader market downturn, with over $1 billion in open positions liquidated in the past 24 hours. Of this figure, $218 million were BTC positions, with $149.5 million longs and $68.6 million worth of shorts.
Remarkably, Ethereum had a higher liquidation figure, with $309.9 million in leveraged trading positions chalked off. Notably, $222.3 million of them are bull bets, while $87.6 million are bear positions. The largest single liquidation order happened with an ETH/USDT trade on OKX, where a user lost $6.25 million.
Don’t Panic Sell Your Bitcoin: Reactions
The profit-taking spree did not impress a faction of the crypto community. For context, a user stated that those selling their BTC after the new all-time high do “deserve to be broke.”
Another prominent market participant, Quinten, disapproved of selling Bitcoin due to an economic metric. Notably, BTC has shown resilience in the face of macroeconomic factors, rebounding each time it dumps on account of such development, and the user believes that selling has never been the best approach.