Investors eye CPI data as crypto downturn causes 190M loss in leveraged positions
Last week, the cryptocurrency market saw a rollercoaster of trading activity, starting strong but ending on a low note. Initially, optimism was high as experts predicted that Bitcoin (BTC) would hit new records. However, the release of strong U.S. job data on Friday changed the mood, suggesting a more hawkish approach by the Federal Reserve.
On June 11, the cryptocurrency market took a sharp dive following the shift in sentiment, causing significant losses for leveraged traders. Bitcoin dropped 2.5%, falling from $69,547 to $66,018, while Ether (ETH) experienced a bigger decline of 2.58% to $3,500. This sudden drop led to widespread liquidations, wiping out almost $190 million from leveraged positions.
Liquidation data from CoinGlass revealed that $190 million was liquidated from 83,912 traders in the last 24 hours, with the largest single liquidation order occurring on OKX, totaling $5.21 million for an ETH/USDT swap.
Bitcoin and Ether leveraged traders suffered the most significant losses, with $46.9 million liquidated in the past 24 hours, of which $36.8 million were long positions and $14.07 million were shorts. Ether traders also faced substantial liquidations, totaling $41.0 million, with $31.3 million in longs and $9.68 million in shorts.
Market analysts had anticipated a volatile week ahead of the FOMC meeting, which historically affects Bitcoin prices and increases open interest. Bitcoin open interest hit a record high before the meeting, indicating potential for increased volatility.
High open interest often leads to more aggressive price movements as active positions influence the market. This can result in a cascade of liquidations for highly leveraged positions, as seen on June 11 when significant market movements caused substantial liquidations, adding to the downward pressure on prices.
Recent data from the U.S. Bureau of Labor Statistics showed that the U.S. CPI remained steady at 0.3% in May, contrary to expectations of cooling to 0.1%. However, on a yearly basis, CPI inflation declined to 3.3% from 3.4% in May. This cooling inflation data boosted market sentiment, especially after strong U.S. job data impacted investor risk appetite.
Lower inflation can alleviate concerns about the Federal Reserve raising interest rates, potentially reducing borrowing costs and increasing disposable income for investments, including cryptocurrencies. This positive sentiment has led to an uptick in Bitcoin’s trading price, currently at $69,195.81, showing a 3.3% increase on a 24-hour chart.
The upcoming FOMC data release will be crucial for the crypto market’s future moves. Despite the recent market correction and significant liquidations, investors and traders should remain vigilant and closely monitor economic indicators. The FOMC’s decisions on interest rates could further impact market volatility and investor behavior in the weeks to come.
Disclaimer: The information provided should not be considered as investment advice. Investing carries risks, and capital is at stake.
