20. July 2024

Bitcoin Price Cools as U.S. Data Sends $80M Shorts to Liquidation

• BTC/USD retraced some of its latest gains on the day, trading at around $24,400 after hitting $24,895 overnight.
• Market reaction to U.S. Producer Price Index (PPI) print for January showed wholesale prices increasing more than expected on a year-on-year basis.
• The U.S. Dollar Index (DXY) climbed above 104.1 to its highest level since the first week of the year as Bitcoin liquidations totaled $80 million in shorts in two days with $65 million coming on Feb. 15 alone.

Bitcoin Price Cools After US Data

Bitcoin price shied away from $25,000 after fresh macroeconomic data from the United States overshot estimates and questions over inflation combined with a resurgent US dollar caused BTC/USD to retreat and trade at around $24,400 on Bitstamp at the time of writing.

Unexpectedly Hot PPI Data

Data from Cointelegraph Markets Pro and TradingView showed that when the U.S Producer Price Index (PPI) print for January came out it showed wholesale prices increasing more than expected on a year-on-year basis causing markets to be rattled and risk assets to decrease in value including S&P 500 and Nasdaq Composite Index which were both down 1.1% at the time of writing according to Game of Trades Investment Research Resource Twitter account comment regarding this unexpected hot data release.

$80M Liquidated In Bitcoin Shorts

The pair had hit $24,895 on Bitstamp overnight marking its highest levels in six months as a surprise rally appeared to catch many traders off-guard over two days leading up to Feb 16th seeing liquidation of 80 Million USD worth of short positions with 65 Million USD being liquidated only Feb 15th itself making it single biggest liquidation since Jan 20th according to Coinglass’s chart regarding same topic .

US Dollar’s Resurgence

This increase in PPI also led towards resurgence for US Dollar as U.S Dollar index(DXY) climbed above 104 reaching its highest level since first week of 2021 showing strength against other currencies due partly because of increased demand for safety amid an uncertain economic outlook because of COVID pandemic still taking toll across globe affecting employment figures which came lower than expected 200K claims per week according to Holger Zschaepitz’s tweet regarding same topic .

BTC Retreats Below 25K Mark

All these factors culminated into retreat for Bitcoin below 25K mark as BTC/USD trended towards 24K at Wall Street open Feb 16th with questions over inflation combining with resurgent US dollar proving too much pressure even though it was near 6 month high only hours before but now is down 2% from previous 24Hour High according To Cointelegraph market pro & Trading view charts regarding BTC/USD pair .