Driven by stronger-than-expected U.S. PPI inflation data, Bitcoin fell to $79,700, while Ethereum posted a weekly decline of 4% amid $309 million in liquidations.
After several weeks of strong gains, market pressure has intensified, investor sentiment has turned extremely optimistic, and speculative bets in the derivatives market have been fueled.
As of press time, Bitcoin is trading at $79,700, down nearly 1% for the day. Meanwhile, Ethereum is down nearly 4% this week, closing around $2,265.
Solana continues to face pressure, with its price declining nearly 3% today, although the token has still outperformed the broader market over a longer time frame.
Over the past few weeks, the market has experienced a strong rally, and investors are now actively taking profits. This upward momentum was previously supported by robust ETF inflows, institutional demand, and more favorable expectations regarding the U.S. regulatory environment.
Leverage and inflation are putting pressure on risk assets.
According to CoinGlass data, total liquidations over the past 24 hours reached $309.8 million, with approximately $241 million coming from long positions. This indicates that a significant number of traders took overly aggressive positions in pursuit of sustained profits, making the market highly vulnerable to shocks when signs of weakness emerge.
Bitcoin and Ethereum have the largest liquidation volumes, and these two assets have historically been the primary targets for derivatives trading.
The latest U.S. inflation data has further pressured the cryptocurrency market downward. The U.S. Bureau of Labor Statistics released the Producer Price Index (PPI) data for April. The data significantly exceeded analyst expectations. The monthly PPI rose by 1.4%, marking the largest monthly increase since March 2022. Year-over-year, the index reached 6%, well above the expected 4.9%.
Producer inflation came in higher than expected, intensifying concerns that the Fed may keep interest rates high for longer, which typically puts pressure on risk assets.
The Crypto Fear & Greed Index has dropped to 47, well below the above-60 levels seen at the beginning of this month, indicating a sharp cooling in market optimism. Similarly, the altcoin seasonality index has fallen from 100 to 47, showing that investors are gradually shifting their focus from high-risk altcoins to more defensive cryptocurrencies like Bitcoin.
Investors are paying attention to deeper pullbacks.
Despite short-term headwinds, analysts note that institutional interest in digital assets remains strong. Activity around tokenized assets and stablecoin infrastructure continues to attract capital from traditional finance.
A few larger-market-cap assets performed relatively strongly, including BNB and TRON. BNB rose over 2% in the past 24 hours.
However, traders remain cautious, as a failure of Bitcoin to hold the $79,000 to $80,000 support zone could trigger another wave of liquidations. Historical patterns suggest that such periods often lead to increased volatility and larger short-term pullbacks.