Crypto Market Plummets After Brief High, Triggering $1 Billion in Liquidations
On August 14, just hours after Bitcoin hit an all-time peak, the crypto market collapsed. The downturn followed strong Producer Price Index (PPI) data. As a result, liquidations surged by 91%, reaching $1 billion. Over 216,000 crypto traders faced liquidation.
Bitcoin’s price plummeted to $117,000, wiping out earlier gains. Other major tokens, including SPX6900, Dogwifhat, Celestia, adn The Graph, also fell by more than 10%. The crash coincided with dwindling hopes of a Federal Reserve interest rate cut in September.
Data from Polymarket shows the chance of a rate cut dropped from 80% to 73%. The CME FedWatch tool echoes this, showing a decline from 99% to 90.6%. These changes came after the release of the July PPI data, which showed a rise from 0% in June to 0.9% in July, and an annual increase from 2.6% to 3.7%.
Austan Goolsbee, Chicago Federal Reserve president, warned that tariffs could cause stagflation, complicating future Fed decisions.
- The crash was partly due to increased liquidations, which added selling pressure.
- Total futures open interest peaked at $215 billion, with a funding rate at +0.0105%, indicating most traders were long.
- Bitcoin formed a double-top pattern with a neckline at $112,000, signaling potential further losses.
Additionally, a bearish divergence pattern suggests further decline.Panic selling may have fueled the dive as prices fell.
