Bitcoin briefly surpassed $124,500 before PPI data triggered a rapid decline, highlighting high volatility and pressure on short-term support levels.
Over 211,400 traders faced liquidations, with total losses nearing $1 billion, including a $6.25 million ETH-USDT-SWAP on OKX.
Inflation concerns and upcoming ETF reports have traders closely monitoring Bitcoin’s next moves amid persistent macroeconomic pressures.
Bitcoin dropped under $118,000 on Wednesday after U.S. Producer Price Index (PPI) data came in stronger than anticipated, unsettling financial markets and halting its earlier surge to fresh record levels.
Inflation Surprise Sends Prices Lower
Fresh government data showed PPI rising 3.3% year-on-year, well above the 2.5% forecast. Traders interpreted the figure as a sign that tariffs are pushing up costs, potentially delaying the Federal Reserve’s timeline for any rate cuts.
Earlier, Bitcoin had climbed past $124,500 for the first time, only to retreat toward $121,000. The sell-off accelerated in the afternoon as sellers drove the price down in a rapid move, briefly breaching the $118,000 mark.
Market analyst Bull Theory said $117,500 is the key level to watch for support. A breakdown could see the asset revisit the $110,000 region, while resistance remains firm at the $124,000 peak set earlier in the session.
Over $1 Billion Liquidated in 24 Hours
The price swing triggered one of the largest liquidation events in recent weeks. According to data shared by Crypto Patel, more than 211,400 traders saw positions wiped out, with combined losses approaching $1 billion.
The largest single liquidation involved a $6.25 million ETH-USDT-SWAP order on OKX. Such outsized losses underscore the risk leveraged traders face when markets turn sharply.
Bitcoin’s 24-hour trading volume hit more than $77 billion during the sell-off, reflecting the heightened activity. Despite the setback, the asset remains around 2% higher compared with its level a week ago.
Rate Policy and ETF Flows in Focus
The PPI data adds another challenge for the Fed, which is balancing slower employment growth against persistent inflation. Higher prices in manufacturing could also show up in next month’s Consumer Price Index (CPI) report.
Analysts are watching closely for signs that inflationary pressures will persist, potentially forcing the central bank to keep rates elevated for longer. Such a stance could influence risk appetite across both traditional and crypto markets.
Market participants are also awaiting today’s ETF report for clues about institutional demand. Shifts in inflow or outflow patterns could play a role in Bitcoin’s next move.
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