The global cryptocurrency market faced a sharp downturn today, shedding nearly 3.85% in total market value, as hotter-than-expected U.S. Producer Price Index (PPI) data dampened hopes for near-term Federal Reserve interest rate cuts.$BTC
Bitcoin (BTC), the largest cryptocurrency by market capitalization, dropped below the $119,000 mark, erasing recent gains. The decline represents one of the most significant single-day drops in recent weeks, with the digital asset sliding from highs near $124,000 earlier this week.
Ethereum (ETH), the second-largest cryptocurrency, was not spared from the sell-off, declining by approximately 2.43%. Altcoins across the board followed the downward trend, adding to the market-wide losses.$ETH
Macroeconomic Pressure Hits Crypto
The sell-off was triggered after the U.S. Labor Department reported stronger-than-expected PPI figures for July. The data reinforced expectations that the Fed will keep interest rates elevated for a longer period to control inflation—an outcome that typically pressures risk assets such as cryptocurrencies.
“Markets had been pricing in potential rate cuts before the end of the year, but the PPI data has shifted that timeline,” said a senior market strategist. “Higher rates reduce liquidity, which directly impacts speculative markets, including crypto.”
Billions in Value Wiped Out
The sudden drop erased an estimated $133 billion from the total cryptocurrency market capitalization. According to liquidation tracking platforms, over $1 billion in leveraged positions were wiped out within 24 hours, marking one of the largest liquidation events of 2025 so far.
Bitcoin’s price decline was matched by sharp drops in major altcoins, with some smaller-cap assets suffering losses of over 5%.
Investor Sentiment Turns Cautious
The latest macroeconomic shock has reignited debates about Bitcoin’s correlation with traditional financial markets. Many investors who had seen BTC as a hedge against inflation are now re-evaluating that stance.$SOL
Despite the current bearish mood, some analysts see the dip as a potential buying opportunity. “Long-term fundamentals remain intact,” one crypto analyst noted. “But in the short term, macroeconomic events will continue to dictate price direction.”