Bitcoin reached a new all-time high today, but has shed over $5,800 since the high. Here’s what could be fueling the correction.
There have been mixed reactions in the cryptocurrency market today, particularly with the massive price fluctuation seen with Bitcoin. Much earlier today, the crypto firstborn attained a new all-time high of $124,277. However, this has gone south quickly, with BTC correcting 4% from the high a few hours after.
Why the Quick Price Turnaround?
Notably, Bitcoin has lost $5,850 from its ATH today, dropping to $118,427 at the time of writing. This has seen it give back all its gains in the past two days, fueled by a series of macroeconomic and on-chain developments.
Specifically, CryptoQuant verified analyst JA Maartunn highlighted in a tweet that the Bitcoin taker sell volume has just spiked to $3.13 billion, a massive uptick from the normal market conditions over the past week.
This indicator tracks the total volume of Bitcoin liquidated by holders instantly. The spike suggests that users are taking liquidity off the market through sell orders, adding selling pressure to Bitcoin’s price.
Meanwhile, a recently released economic indicator is also fueling this dump. The US producer price index (PPI) rose to 3.3%, which is higher than expected. For the uninitiated, this indicates that the price producers receive for their products has increased, signaling rising inflation.
While the core consumer price index (CPI) looked good, the high PPI raises concerns over the inflation situation in the United States. This is also a setback to the highly expected interest rate cut in September, with Polymarket showing a drop in the odds of the event happening.
Crypto Liquidation Spike Amid Bitcoin Downturn
Bitcoin’s massive correction has spurred a broader market downturn, with over $1 billion in open positions liquidated in the past 24 hours. Of this figure, $218 million were BTC positions, with $149.5 million longs and $68.6 million worth of shorts.
Remarkably, Ethereum had a higher liquidation figure, with $309.9 million in leveraged trading positions chalked off. Notably, $222.3 million of them are bull bets, while $87.6 million are bear positions. The largest single liquidation order happened with an ETH/USDT trade on OKX, where a user lost $6.25 million.
Don’t Panic Sell Your Bitcoin: Reactions
The profit-taking spree did not impress a faction of the crypto community. For context, a user stated that those selling their BTC after the new all-time high do “deserve to be broke.”
Another prominent market participant, Quinten, disapproved of selling Bitcoin due to an economic metric. Notably, BTC has shown resilience in the face of macroeconomic factors, rebounding each time it dumps on account of such development, and the user believes that selling has never been the best approach.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
