Cryptocurrency Market, $402 Million Liquidation Bomb...Is the Real Crash Beginning?

▲ Bitcoin (BTC), decline, bear market/AI-generated image

The cryptocurrency market was engulfed in a rapid risk-off trend on May 14, due to the shock of the US Producer Price Index, outflows from Bitcoin spot ETFs, and large-scale liquidations.

CoinGape reported on May 14 (local time) that the cryptocurrency market expanded its losses due to inflation concerns and the impact of ETF outflows, with Bitcoin (BTC) falling below $80,000 amid recent selling pressure. According to the article, the total cryptocurrency market capitalization decreased by approximately 2% in the last 24 hours, shrinking to $2.65 trillion, and Bitcoin dropped below $79,000. Ethereum (ETH) also reacted to the worsening macroeconomic conditions, falling to $2,230 during the trading day.

Major altcoins, including Solana (SOL) and XRP, also saw declines of 2-6%. Cryptocurrency-related stocks also recorded concurrent weakness. Shares of Strategy Inc. and Bitmine Immersion Technologies Inc. fell by approximately 3% and 2% respectively, reflecting selling pressure across risk assets.

The biggest catalyst for this decline was the US Producer Price Index (PPI). The April PPI rose by 1.4% month-over-month, significantly exceeding market expectations, and the annual PPI inflation rate reached 6%, its highest since December 2022. Investors are focusing on the first Federal Open Market Committee (FOMC) meeting led by Federal Reserve Chairman Kevin Warsh, scheduled for June 17, which has been presented as a variable to gauge the future direction of monetary policy.

Weakening institutional demand also fueled market instability. According to SoSoValue data, approximately $635 million was net-outflowed from US Bitcoin spot ETFs on May 13. BlackRock's IBIT saw the largest outflow, with about $285 million exiting. During the same period, $36.3 million was also outflowed from Ethereum spot ETFs, with approximately $21.1 million exiting BlackRock's ETHA. The article analyzed that inflation indicators weakened investor confidence, leading to institutional fund outflows.

Chain liquidations in the derivatives market deepened the downturn. According to Coinglass data, over 125,000 traders were liquidated in the last 24 hours, with total liquidations exceeding $402 million. Most liquidations focused on long positions, with Bitcoin long position liquidations alone amounting to approximately $110 million. After Bitcoin failed to break above $82,000, panic selling by leveraged investors intensified, and the market shifted its focus to the outcome of the vote on the US crypto market structure bill (Clarity Act) and the potential for regulatory support.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*