The cryptocurrency and stock markets crashed, and the euro dropped below parity with the dollar after the U.S. inflation report for June came in a full 0.3 percent higher than predicted.
Bitcoin (BTC) plunged more than $1000 in the first 15 minutes after the United States Consumer Price Index (CPI) data, which came in considerably above estimates, was published on July 13.
Prior to the CPI event, altcoins were already moving in lockstep behind BTC and gave up recent gains with the release of the report, although prices have now begun to climb once more.
A sizable amount of liquidation was caused by the bumpy market price action as traders lost their wagers on the direction of Bitcoin and other cryptocurrencies over the past 24 hours. 52.81 percent of all liquidations, according to data from Coinglass, are long order liquidations.
In the past 24 hours, 79,256 traders from across the cryptosphere liquidated their long orders, bringing the total amount liquidated to more than $250 million.
Some traders had a brief surge of excitement after Bitcoin’s advances earlier today, but that optimism was short lived. The gains made during the first week of the month have all been lost as Bitcoin and the market as a whole have retreated near yearly lows.
Expectations had favored an annualized CPI of 8.8 percent; however, the figure was still the highest since the beginning of the 1980s.
The Federal Reserve’s plan to increase rates further due to inflation quickly soured investor sentiment toward risk assets, including cryptocurrencies.
It’s currently impossible to predict a local bottom because of the Fed’s quantitative tightening and regulation, as well as the fact that investors are clearly avoiding high-volatility assets.