Crypto Market Suffers $1B Liquidations After PPI Report

July PPI sparks $1B crypto liquidations as Bitcoin, Ethereum, and altcoins tumble. What’s next for the market?

The latest U.S. Producer Price Index (PPI) report has sent shockwaves through the crypto market. The 24 hours after its release saw total crypto liquidations of more than $1 billion. 

Market capitalisation fell by $133 billion as well, and dropped to $3.98 trillion.

The downturn hit 90% of the top ten cryptocurrencies, with only Tether (USDT) avoiding losses. Bitcoin fell to $119,098 after setting a record above $123,700 the day before. Ethereum dipped to $4,452 before recovering slightly to $4,643.

Long Positions Bear the Brunt of Liquidations

According to Coinglass, $1.02 billion worth of crypto positions were liquidated, with over 221,000 traders getting kicked out of the market. Long trades accounted for $872.37 million of the total losses, while shorts lost $145.49 million.

Ethereum saw the worst liquidations with $351.8 million cleared from the market. Out of this, $272.47 million came from long positions and $79.36 million from shorts.

Dogecoin suffered the worst decline among major coins and dropped 10.3%. Other high-performing altcoins like Solana and XRP also fell.

July PPI Report Comes in Hot

The U.S. Bureau of Labour Statistics released the July PPI report on August 14. The data showed a 0.9% month-over-month increase, which was far above economists’ expectations of 0.2%. From a yearly perspective, PPI rose 3.3%, which is the largest 12-month increase since February 2025.

Core PPI, which excludes food and energy, also surged 0.9% in July. This was much higher than the expected 0.2%. Year-over-year, core PPI climbed 3.7%, compared to predictions of 2.9%.

The hotter-than-expected PPI data also shows stronger inflationary pressures. This further increases the chances of higher interest rates. 

As a result, traders who had bet on rising prices found themselves on the wrong side of the market.

Analysts Warned of Vulnerabilities

Crypto analyst Michaël van de Poppe noted that the sell-off was made worse by high leverage in altcoins. He described the drop as “liquidations after liquidations on long positions,” and pointed out that the correction was both steep and necessary.

Glassnode data supported this view and showed that open interest in altcoins had recently hit new highs. 

The market sentiment came under even worse pressure due to remarks from U.S. Treasury Secretary Scott Bessent. He confirmed that the U.S. Strategic Bitcoin Reserve will only be funded through seized assets, not new purchases.

While this development was not directly tied to PPI, Bessent’s comments added to the negative sentiment by showing that the US government plans to be less aggressive about its involvement with Bitcoin.

Interestingly, before the PPI release, the CME FedWatch tool showed a 100% chance of a September rate cut. That probability has since fallen to 96%. This means that investors will now watch incoming economic data for further clues on the Fed’s next moves.

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