$562M Liquidation Surge Hits Crypto Market After PPI Inflation Jump

Bitcoin slipped below $77,000 on Thursday, reaching a daily low of $76,651 after the U.S. Bureau of Labor Statistics reported a 0.4% monthly increase in the Producer Price Index (PPI). The modest rise, while largely expected, sparked a broad sell‑off in crypto markets.

Price movement and market impact

Before the PPI release, Bitcoin had been trading in a range between $78,000 and $79,000. After the data, the price briefly recovered above $77,000 but remained down more than 2.5% over the previous 24 hours, with market capitalization falling to $1.55 trillion.

Derivative liquidations

Bitstamp data showed that the sharp drop led to approximately $74 million in long liquidations within four hours, bringing 24‑hour long liquidations to $112 million, while short liquidations totaled $8 million. Overall market liquidations peaked at $562 million, with long positions accounting for about $484 million.

Rate‑hike expectations

Following the PPI release, betting markets on Polymarket and Kalshi raised the odds of a 25‑basis‑point Federal Reserve rate hike to 63%, a nine‑percentage‑point increase. The CME FedWatch tool indicated a 67% probability of such a hike.

Broader macro backdrop

U.S. Treasury efforts to cap long‑term yields by expanding buyback operations to $6 billion were rejected by the bond market, with the 10‑year Treasury yield climbing past 4.90%, up 95 basis points since the start of the Iran conflict and adding another 10 basis points after the Treasury’s announcement. Mortgage rates rose in tandem, dampening residential real‑estate activity.

Outlook

With Bitcoin showing little upward momentum ten days into September, the cryptocurrency may close the month flat unless new macroeconomic data revives buying pressure.