The alarming inflation data causes a sharp decline in the price of Bitcoin from its all-time highs
The performance of the Bitcoin market has been crucial in driving the valuations of BlackRock's Bitcoin ETF and other ETFs to all-time highs. On Wednesday, the cryptocurrency reached a new all-time high close to $124,000. This surge was primarily due to optimism surrounding a possible 25 basis point cut in U.S. interest rates, as traders heavily discounted monetary easing.
However, the situation changed drastically with the release of the U.S. Producer Price Index (PPI) data for July. Bitcoin fell below $118,000 from its previous high, as traders reacted to the latest inflation figures, which were higher than expected.
The sell-off wiped out more than $930 million in leveraged positions and caused over $1 billion in cryptocurrency liquidations within 24 hours.