A crypto market crash is underway today, August 14, just hours after Bitcoin surged to a new all-time high.
Summary
- The crypto market crash happened after the strong PPI data.
- It happened as liquidations jumped by over 90% to $1 billion.
- Bitcoin formed the highly bearish double-top pattern.
Bitcoin (BTC) price erased its earlier gains and tumbled to $117,000, while top tokens like SPX6900 (SPX), Dogwifhat (WIF), Celestia (TIA), and The Graph dived by over 10%.
The ongoing crash triggered a 91% jump in liquidations, totaling over $1 billion. More than 216,000 traders were liquidated.
Crypto market crash linked to Fed interest rate cut odds
The crypto and stock markets retreated as the odds of a September interest rate cut declined slightly. Polymarket data placed these odds at 73% down from this week’s high of 80%.
Similarly, the CME FedWatch tool shows that the odds dropped from a high of 99% on Wednesday to 90.6%. These odds declined after the US published the July producer price index data, which were higher than expected.
According to the Bureau of Labor Statistics, PPI rose from 0% in June to 0.9% in July and from 2.6% to 3.7% on an annual basis, indicating that tariffs are having an impact.
The PPI report came two days after the bureau released consumer inflation data. The headline CPI remained at 2.7%, while the closely watched core figure rose to 3.1%, moving further away from the Fed’s 2% target.
These figures arrived a day after Austan Goolsbee, president of the Chicago Federal Reserve, said he would need to see inflation come down before supporting rate cuts. He warned that tariffs will be stagflationary, complicating the Fed’s next meetings.
Surging liquidations contributed to the crypto crash
The crash was also fueled by a spike in liquidations, which add selling pressure to the market. Data from CoinGlass shows total futures open interest peaking at over $215 billion, with the funding rate climbing to +0.0105%.
These figures indicate that most traders were positioned long as Bitcoin and altcoins surged earlier in the day. Following the PPI report, liquidations spiked, pushing crypto prices lower. Panic selling likely compounded the decline as prices fell.
Bitcoin price double-top pattern
Technically, the plunge followed the formation of a double-top pattern, with the neckline at $112,000. This setup often signals more downside, as it reflects investor hesitation to push prices above the previous high.
Worse, Bitcoin has also formed a bearish divergence pattern, which is marked by a large bearish candle following a smaller bullish one. This suggests BTC could fall toward the 50-day moving average, which would likely drag top altcoins lower as well.
