#CreatorPad sharp drop below $118,000 sent shockwaves through the crypto market on Thursday, as inflation data spooked investors and triggered over $1 billion in leveraged liquidations.

The steep decline came after Bitcoin’s recent rally to multi-month highs, raising questions over whether the bull run can sustain its momentum.

The sudden market turbulence reflects a broader risk-off sentiment, with both traditional and digital asset traders reacting to fresh U.S. inflation data. While Bitcoin had been trading steadily above key resistance earlier in the week, the sell-off underscores how sensitive the market remains to macroeconomic shifts.

Inflation Data Sparks Risk-Off Sentiment

The price fall overlapped with the release of hotter-than-expected U.S. inflation data, which reignited fears that the Federal Reserve will keep interest rates higher for a longer period. Higher inflation readings have a deflationary impact on risk asset demand, such as cryptocurrencies, as investors pre-empt tighter monetary conditions by rebalancing portfolios.

For Bitcoin, in turn, long one of the darlings of inflation-hedge speculation, the reaction was a reminder that short-term price action is still heavily linked to macro sentiment. While characters like Mike Alfred are optimistic on Bitcoin’s store-of-value argument with inflation pressures increasing, short-term speculators appear more worried about the prospect of closing liquidity and reduced speculative inflows.

$1 Billion in Liquidations Rattles the Market

Figures from cryptocurrency analytics firms showed that more than $1 billion of leveraged positions were unwound during the first 24 hours