Crypto Markets Fragile amid $1B Liquidations Triggered by PPI Surprise

The cryptocurrency market is cooling slightly after its recent rally, with most large-cap crypto assets flat or moderately down over the past 24 hours. Total crypto market capitalization dipped 1.6% to $4.11 trillion, as traders digest today’s U.S. PPI report and the upcoming Trump-Putin meeting in Alaska.

Bitcoin (BTC) is trading near $118,600, down 2% on the day, after the largest cryptocurrency shortly set a new all-time high just above $124,000.

Ethereum (ETH) is flat today, but remains the week’s top performer, up 22% over the past seven days. The largest altcoin is currently trading near $4,661 after attempting to break past 4,800 earlier today, but meeting resistance.

XRP and Dogecoin (DOGE) were the biggest losers among the top-10 assets today, with XRP down 4% to $3.11, and DOGE down 5.6% to $0.22. Solana (SOL) is flat at $196, while its weekly gains stand at nearly 15%.

The pullback in overall markets follows a sharp spike in liquidations. CoinGlass data show over $1 billion in positions were wiped out over the past 24 hours, with long traders accounting for more than $750 million of the total.

Traders now seem to be watching the $5,180 ETH level, where more than 40,000 ETH in positions on Hyperliquid could face liquidation, per CoinGlass data.

The market-wide retracement comes amid rising Treasury yields after hotter-than-anticipated U.S. Producer Price Index (PPI) — with factory-gate inflation rising 0.9% in July, the largest monthly jump in over three years — which lowered hopes of an aggressive Fed rate cut.

Despite still high expectations for a 25 bp cut in September, Fed futures pulled back slightly, though the probability of a first 0.25% move remains near certainty.

Markets are also awaiting the meeting of U.S. President Donald Trump and Russian President Vladimir Putin in Alaska this Friday to discuss a ceasefire in Ukraine, with a follow-up meeting with Ukrainian President Volodymyr Zelenskyy and a possible air truce also under consideration.

Fragile Market

Analysts at Glassnode noted in an X post on Wednesday that open interest across major altcoins is now at a record $47 billion, increasing both upside and downside moves. The on-chain analytics firm also added that short-term Bitcoin holders briefly sold at a loss before regaining footing, suggesting traders are now trying to defend a cost basis near $112,000.

As for crypto ETFs, institutional buying remains concentrated in ETH, with little spillover into other large-caps beyond SOL and XRP, CoinShares head of research James Butterfill pointed out in an X post today. Spot ETH ETFs saw another strong day of inflows yesterday, netting $729.14 million across all products, per SoSoValue.

Bitcoin ETFs drew in $86.9 million on Wednesday, showing traditional investors are still preferring the second-largest cryptocurrency for now.