5 min readBitcoin trades lower on Friday after reaching a record high of 124.4k in the previous session as US wholesale inflation data dampened hopes for aggressive Fed rate cuts.
Bitcoin is steadying at 119k at the time of writing, up from a low of 117k yesterday but still down over 3% from its record high. Other cryptocurrencies were also stabilising following yesterday’s selloff, with ETH trading back above 4650 and Cadano rebounding by 5%. The total cryptocurrency market cap trades 2.3% lower over the past 24 hours at $4.05 trillion.
The sharp drop saw liquidations exceed $1 billion over the past 24 hours, according to Coinglass data, affecting 221,364 traders. Long positions accounted for the lion’s share of losses with $872.37 million liquidated.
Bitcoin had jumped to a record high of $124.4k in the previous session but quickly gave up those gains following the release of US PPI inflation data.
US PPI data dampens large Fed rate cut bets.
The upside surprise in PPI, which posted the largest gain in three years, raised worries over inflation and lowered expectations surrounding a larger Fed rate cut in September. While the market is still pricing in a 90% chance of a 25 basis point rate cut, markets pared back bets of a 50 basis point cut. This re-pricing of Fed rate cut expectations pulled risk assets such as crypto lower.
Attention will now turn to US retail sales and the University of Michigan confidence for more clues on the health of the US economy.
In addition, comments from U.S. Treasury Secretary Scott Bessent could have also been a contributing factor to the bearish sentiment. Bessent recently stated that the US strategic Bitcoin reserve will be funded with seized assets only and not through new purchases.
Cardano trades 17% higher this week.
Cardano is rising for a fourth straight day despite the broader market correction. ADA trades 2.3% higher at 0.9471 at the time of writing, putting gains this week at 17%, following 15% gains last week.
The gains underscore Recent buying interest in the altcoin market. Traders are also interested in Cardano derivatives as the ADA open interest hits a record high of $1.77 billion on Friday, up from $1.57 billion in the previous day.
Furthermore, ADA shows signs of a strengthening long-term holder base. As of Tuesday, 15 billion ADA remained unmoved for more than a year, implying reduced selling pressure as altcoin season expectations rise. At the same time, retail interest in the broader altcoin market is also increasing. According to Google Trends data, searches for “altcoin” have reached their highest level since 2021, whilst Cardano interest is at a 5-month high.
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