Investors keep an eye on CPI data as 190M in leveraged positions are wiped out by crypto downturn

Last week, the cryptocurrency market saw wild fluctuations, starting strong but ending on a low note. Initially, there was a surge of optimism as experts predicted that Bitcoin (BTC) would reach new heights. However, things took a turn when robust U.S. job data was released on Friday, hinting at a more aggressive approach from the Federal Reserve.

As a result of this shift in sentiment, on June 11, the cryptocurrency market experienced a sharp decline, causing significant losses for leveraged traders. Bitcoin fell by 2.5%, dropping from $69,547 to $66,018, while Ether (ETH) saw a larger decline of 2.58%, plummeting to $3,500. This sudden drop led to mass liquidations, wiping out nearly $190 million from leveraged positions.

Data from Coinglass showed that the largest single liquidation order of $5.21 million occurred on OKX, involving an ETH/USDT swap. Bitcoin and Ether leveraged traders suffered the most losses, with $46.9 million in liquidations in the past 24 hours. High open interest in the market, particularly ahead of the FOMC meeting, was predicted to have a significant impact on prices and increase volatility.

The recent U.S. CPI data showed that inflation remained steady at 0.3% in May, contrary to expectations of a cooling to 0.1%. However, on a yearly basis, CPI inflation dropped to 3.3% from 3.4% in May. This cooling inflation data boosted market sentiment, especially after last week’s strong U.S. job data affected investor risk appetite.

Lower inflation can ease concerns about the Federal Reserve raising interest rates, potentially reducing borrowing costs and increasing disposable income for investment in riskier assets like cryptocurrencies. This positive sentiment was reflected in Bitcoin’s current trading price of $69,195.81, showing a 3.3% increase on a 24-hour chart.

Given the recent market conditions and the potential impact of the upcoming FOMC data release, investors and traders need to remain cautious and closely monitor economic indicators. The decisions made by the FOMC regarding interest rates could further affect market volatility and investor behavior in the weeks to come.

Disclaimer: The information provided in this article should not be taken as investment advice. Investing involves risks, and capital is at stake.