Bitcoin, a representative cryptocurrency in the market, has continued its downward trend after the recent U.S. inflation index announcement, falling to around $115,000. Despite the short-term decline, there are suggestions that investment sentiment may remain constrained for the time being.
On August 18th local time, according to Coinbase, a major U.S. cryptocurrency exchange, Bitcoin was traded at $115,936, a 2.07% drop from the previous day. This is approximately 7% lower than the all-time high of $124,500 recorded on the 13th. During trading, it even dropped to around $114,700, falling below the psychological support level of $115,000.
The background of Bitcoin's decline is the recently announced U.S. July Producer Price Index (PPI). According to the U.S. Department of Labor, the July PPI rose 0.9% month-on-month, significantly exceeding the market's expected 0.2%. Particularly, the core PPI, excluding energy and food, increased by 0.6%, also surpassing expectations. As wholesale prices rise rapidly, expectations for the Federal Reserve's rate cut have diminished, creating a cautious atmosphere for risk assets.
This investment sentiment contraction has intensified selling across the market, leading to large-scale position liquidations. According to Coinglass, a U.S.-based data analysis institution, approximately $576.35 million (about 800 billion won) in assets were forcibly liquidated in the past 24 hours. Notably, $124 million in long positions betting on Bitcoin price increases were liquidated, and $184 million in long positions for Ethereum were also settled.
Ethereum, the second-largest market cap cryptocurrency, also could not escape downward pressure. Having approached $4,800 and been on the verge of an all-time high, Ethereum dropped 5.28% to $4,334 in a single day. Representative altcoins such as XRP, Solana, and Dogecoin also reflected the market's weak sentiment, showing declines between 4% and 6%.
This trend depends on how the Federal Reserve will adjust its monetary policy going forward. The market analysis suggests that if the wholesale price increase supports the Fed's tightening stance, the cryptocurrency price rebound may be limited. Conversely, if concerns about economic growth slowdown increase and rate cut expectations rise again, risk asset investment sentiment may recover.
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