Bitcoin is below $120,000 after hitting a fresh high of nearly $123,000 on July 14 amid fears of US economic inflation.
According to data from Encryption, The top crypto trades at around $116,894, representing a decline of over 5% in just 24 hours.
Nikolai Sondergaard, Nansen’s research analyst, customs Encryption A price adjustment was expected for the Bitcoin’s powerful rides ranging from $108,000 to $122,000. He focuses on key liquidation activities surrounding the $116,300 mark, and has reached a critical psychological level monitored by traders.
In particular, Coinglass data shows that more than $461 million liquidation has occurred in the market.
Long traders who had hoped Bitcoin prices would continue to rise faced with the brunt of losses with a liquidation worth $383 million. Conversely, the short trader lost $78.54 million in the same period.
Bitcoin traders betting on further profits suffered the biggest losses worth more than $150 million, while Ethereum traders saw a liquidation of around $10.5 million.
This broad liquidation of the market as a whole reflects the volatility and risks traders face in the crypto sector, particularly during the period of significant price corrections.
Bitcoin awaits the outcome of our inflation
Market analysts also attribute Bitcoin’s return to the wider US economic situation.
Bitfinex analysts noted that Bitcoin investors are adopting a cautious attitude ahead of the release of the US Consumer Price Index (CPI). CPI tracks the average price changes paid for goods and services. It is an important measure of inflation and reflects the purchasing power of a currency.
The analyst said Encryption that:
“With approximately 3.0-3.1% of core inflation compared to the previous year, printing at higher than expected (core > 3.2%) can slow the easing easing, reduce market sentiment and increase borrowing costs.
However, softer CPI readings can turn the market narrative overturn, especially if headline inflation falls below 2.5% and core trends fall to 2.9%. They said:
“I saw this play in May. The cooler CPI prints have led to a rapid rally in both stocks and crypto. A similar result today is that you can push Bitcoin back to $120K+ again, especially if the ETF influx is strong like the last two weeks.”