Cooling U.S. inflation triggered a broad risk-on move in financial markets on Tuesday and helped fuel a wave of crypto short-liquidations as traders reacted to growing expectations that the Fed may have greater leeway to ease monetary policy if inflation remains moderate.
In the last 12 hours almost $220 million crypto positions liquidated More than 80% of losses are accounted for by bearish tradersAccording to CoinGlass data.
Crypto shorts bear the brunt of the market rally
CoinGlass data showed total liquidations reached $219.77 million in the last 12 hours. This includes: $179.26 million in short positions And $40.51 million in long positions.
Ethereum recorded the largest liquidation $98.73 millionfollowed by Bitcoin $59.59 millionBoth assets rebounded following inflation data.
In the previous hour alone, short liquidations totaled $56.05 millioncompared to $7.18 million in long liquidationsIt highlights the extent of the squeeze.
The figures show that many traders who took positions at lower prices were forced to close their positions as crypto markets rose following the macroeconomic announcement.
Softer CPI increases appetite for risk assets
The move comes after the U.S. Bureau of Labor Statistics reported Consumer Price Index (CPI) decreased 0.4% In June. This was the largest monthly decline since April 2020.
Annual inflation slowed down 3.5%While core inflation remained unchanged on a monthly basis, 2.6% from year to year.
The softer inflation reading weighed on US dollar and Treasury yields, while supporting risky assets including cryptocurrencies.
Bitcoin traded higher following the announcement, as investors interpreted the report as a sign that inflationary pressures may ease, potentially giving the Federal Reserve more flexibility on future interest rate decisions.
Although the 12-hour liquidations figures include activity before the CPI is released, the dominance of short liquidations suggests that the inflation report accelerated the upward move, forcing bearish traders to unwind their positions.
Ethereum leads wave of short liquidations
Ethereum accounted for nearly half of all crypto liquidations during this period, outpacing Bitcoin despite Bitcoin’s larger market cap.
This may reflect stronger price momentum in ETH or more heavily leveraged positioning ahead of the CPI release.
While Bitcoin has also experienced significant liquidations, ETH’s larger share demonstrates how macroeconomic events can have a large impact on leveraged positions in the broader crypto market.
Final Summary
- Crypto markets saw liquidations of $219.77 million in 12 hours; Short positions accounted for $179.26 million as traders reacted to cooling U.S. inflation.
- The softer CPI report boosted risk appetite, pushing Bitcoin and Ethereum higher, while triggering a wave of short liquidations led by Ethereum.
