Bitcoin, ether, and other key tokens fell drastically in the past 24 hours, lowering crypto market capitalization by 7%. The decrease was caused by higher-than-expected inflation and speculators taking profits, with some analysts forecasting additional losses before a return.
Crypto market value fell 7%, the largest decrease this year, with bitcoin {{BTC}} falling 8% in 24 hours, wiping out weekly gains and triggering a marketwide decline.
Bitcoin fell from Thursday's high of $73,000 to early Friday's $65,800 before recovering. While Coindesk 20, a wide index of most liquid cryptocurrencies, fell 8.25%.
Dogecoin and Shiba Inu experienced 13% losses, while Ether {{ETH}}, Cardano’s ADA, BNB Chain’s BNB, and XRP also experienced losses. Solana's SOL tokens were the sole big green token, up 1% from Thursday.
As the February Producer Price Index (PPI) rose 0.6%, triple the pace in January and doubling economist predictions, the sell-off began during U.S. trade hours on Thursday, shattering hopes for a May rate cut.
Crypto-tracked futures lost $800 million, second-most this year. Longs lost $660 million in liquidations, presumably adding to the rapid drop. A trader's leveraged position is liquidated when an exchange forces it to close due to a partial or whole margin loss.
Some traders predicted additional losses in the coming weeks before a price rebound.
“New historical highs are a trigger for selling,” FxPro senior market analyst Alex Kuptsikevich told CoinDesk via email. Some players are taking profits, which begs the question of whether there will be enough hot buyers at current levels or if most will wait for a further correction.”
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