Quick Takeaways
-
Bitcoin Plummets: Bitcoin fell to its lowest level in over seven weeks, hitting $108,100, following the release of US PCE data showing a core inflation rise to 2.9%.
-
Expected Rate Cuts: Despite inflation staying slightly above the Federal Reserve’s target, there’s a strong 81% expectation for a 25 bps rate cut in September.
-
Market Reaction: The cryptocurrency market has reacted negatively, with Bitcoin losing momentum rapidly, erasing gains from last week’s surge post-Jackson Hole speech.
-
Widespread Liquidations: Over $170 billion has been wiped from the total crypto market cap, affecting over 140,000 traders with liquidations exceeding $500 million in value.
Bitcoin Price Slumps to 7-Week Low After US PCE Inflation Data: Liquidations Skyrocket
Bitcoin’s price fell dramatically today, reaching a seven-week low of $108,100. This decline followed the release of the US Personal Consumption Expenditures (PCE) data, which showed an overall price increase of 2.6% in July. Economists had anticipated this outcome, but core PCE inflation climbed to 2.9%, slightly exceeding June figures.
The Federal Reserve uses PCE data as its primary inflation measure. Although the July percentage surpassed the central bank’s target, the difference remains minor. Consequently, analysts expect the Fed to consider a 25-basis-point rate cut in September, with current odds at 81% according to Polymarket.
Despite this positive outlook for monetary policy, the cryptocurrency market reacted sharply. Bitcoin, which had recently rebounded to $111,800, faced renewed selling pressure, pushing its value down significantly. The asset had surged after Fed Chair Jerome Powell’s speech during the Jackson Hole summit, where it jumped from $112,000 to over $117,000. However, it lost momentum quickly, raising concerns about the sustainability of the current market rally.
Other cryptocurrencies mirror Bitcoin’s turmoil. Ethereum is down more than 3%, struggling to hold the $4,300 mark, while XRP has dipped to $2.83. Overall, the cryptocurrency market cap shrank by $170 billion, settling at $3.830 trillion.
The volatility has wreaked havoc on over-leveraged traders, leading to daily liquidations exceeding $500 million. Over 140,000 traders found themselves liquidated, with significant losses reported on platforms like OKX.
This situation highlights the unpredictable nature of cryptocurrency investments. While Bitcoin and its peers offer unique solutions for digital transactions and investments, their market instability poses real challenges for traders and investors alike. Thus, as the tech landscape evolves, so too does the dialogue around the feasibility and reliability of cryptocurrencies as a viable financial alternative.
Continue Your Tech Journey
Stay informed on the revolutionary breakthroughs in Quantum Computing research.
Stay inspired by the vast knowledge available on Wikipedia.
Disclaimer
This content is for informational and entertainment purposes only and does not constitute financial or investment advice. Cryptocurrency is highly speculative and carries significant risk, including the potential loss of your entire investment. Do not make financial decisions based on this information. Consult a licensed financial advisor before investing. This site does not offer, sell, or advise on cryptocurrency, securities or other regulated financial products in compliance with SEC and applicable laws. Please do your own research and seek professional advise.
CryptoV1
