Bitcoin slid below $78,000 on Tuesday before a partial recovery, triggering $79 million in bitcoin liquidations as part of a broader $264 million wipeout across crypto markets. Traders are now positioning for August producer and consumer price data due later in the week, which could shape the Federal Reserve's next move on rates.
Bitcoin Slips Below $78,000
Bitcoin dropped below $78,000 on Tuesday, touching a daily low before a relief rally pushed it back up. The low came in at $77,603, and the recovery lifted the price to around $78,600.
The move followed a weekend decline that had already pulled the token below $79,000, leaving it nearly flat for the first week of September. However, the token initially held above $79,000 despite dipping below $78,800 twice. Then, shortly before 11 p.m. EST on Monday it broke below $78,000 without enough buying pressure to reverse the slide.
The decline continued overnight, and by 9:50 a.m. EST on Tuesday bitcoin touched its $77,603 low. Its market capitalization stood at $1.58 trillion by 11:20 a.m. EST.
Liquidations Hit $264 Million
The price swing since Monday afternoon wiped out $79 million in bitcoin positions, with long bets accounting for roughly 90% of the losses. Across the broader crypto market, total liquidations reached $264 million, split between $187 million in longs and $77 million in shorts.
As a result, some analysts expect bitcoin to trade sideways as traders wait for key inflation data. The August Producer Price Index arrives Thursday, followed by the Consumer Price Index on Friday. A hotter-than-expected inflation print would give the Federal Reserve more room to pursue a rate hike at its next policy meeting.
Rate Path Looms Over Crypto
Higher interest rates lift yields on risk-free assets like Treasuries, which tends to dampen appetite for speculative, non-yielding holdings such as bitcoin. Consequently, a tighter monetary outlook would likely keep bitcoin's price range-bound or push it lower in the near term.
Source: Bitcoin News
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