A sharp upside surprise in U.S. producer price inflation triggered a $420 million wipeout in crypto markets on Wednesday, exposing lingering vulnerabilities in market leverage during macroeconomic data shocks.
What Happened: The U.S. July Producer Price Index rose 3.3% year-on-year, exceeding forecasts of 2.5% and marking its highest level since February. On a monthly basis, prices jumped 0.9%, the largest increase since June 2022.
The report came alongside a revision of June’s annual rate from 2.3% to 2.4%, reinforcing the picture of sustained cost pressures in the production pipeline.
Within 20 minutes of the release, Bitcoin (CRYPTO: BTC) plunged from $121,193 to $117,550, according to TradingView data. Ethereum plunged below $4,500 from above $4,700.
The rapid decline coincided with widespread liquidations in leveraged positions, with …