Crypto Weekly Wrap: Bitcoin Hits $124K Before Inflation Data Sparks $1B Liquidation Frenzy

The crypto economy ended the week slightly higher, rising from $3.97T to $4.04T, but the real story was the volatility beneath the surface.

Crypto Market’s Eventful Week

After appearing to keep up the momentum from the previous week, the crypto economy ultimately ended this week marginally higher, rising from $3.97 trillion to $4.04 trillion. This seven-day performance, however, fails to capture how eventful and milestone-setting the week was.

Prior to the release of the U.S. PPI data on Aug. 14, the crypto economy was on an upward trajectory, with bitcoin ( BTC) and major altcoins like ethereum ( ETH) leading the charge. BTC not only surpassed the $123,000 threshold but also went on to establish a new all-time high of $124,517. Meanwhile, ETH surged to $4,791, placing it within striking distance of its 2021 all-time high. The collective gains of other high-cap altcoins, including SOL and DOGE, contributed to a significant market rally that propelled the crypto economy’s market capitalization to a near-record $4.28 trillion.

However, the release of the hotter-than-expected PPI ultimately sparked a brutal pullback, which wiped out more than $1 billion in leveraged positions. On that day, BTC plunged from more than $124,000 to under $118,000 in a matter of minutes, while ETH, which was seemingly edging closer to setting another ATH, dropped to below $4,500.

The sharp increase in the PPI is widely interpreted as the first concrete evidence that the Trump administration’s aggressive tariff policy is driving up inflation. This renewed concern over rising costs, in turn, has effectively crushed hopes that the U.S. Federal Reserve will proceed with long-anticipated interest rate cuts, leaving investors to grapple with the prospect of a tighter monetary policy.

Although BTC did recover, rising to $119,000 the following day, those gains were short-lived as the leading the top crypto asset ultimately closed the week around $118,800. Despite this, BTC still ended the week 0.2% higher while ETH closed the seven-day period 4.4% higher. This was largely the case for several top-20 digital assets; many ended the period with marginal gains.

A few high-cap altcoins, however, closed the period in the red, with XRP the biggest loser among the altcoins. After starting the period trading just above $3.30, XRP, which has struggled to reignite a rally that saw it set a new ATH in July, closed around $3.12 or 6.7% lower. XLM (6.8%) and SUI (6.5%) were the other major losers.

With many analysts still projecting it to breach the $4 mark, it now remains to be seen if XRP can finally start to make a move toward this in the coming few weeks.