Bitcoin has slipped below the $120,000 mark after hitting a fresh all-time high near $123,000 on July 14 amid fears of US economic inflation.
According to data from CryptoSlate, the top crypto is trading around $116,894, representing a drop of over 5% in just 24 hours.
Nicolai Sondergaard, a research analyst at Nansen, told CryptoSlate that a price correction was expected following Bitcoin’s strong run from $108,000 to $122,000. He noted significant liquidation activity around the $116,300 mark, making it an important psychological level for traders to monitor.
Notably, data from Coinglass shows that over $461 million worth of liquidations occurred in the market.
Long traders, who expected Bitcoin’s price to continue rising, faced the brunt of the losses, with $383 million worth of liquidations. Conversely, short traders lost $78.54 million during the same period.
Bitcoin traders betting on further gains took the heaviest losses, amounting to over $150 million, while Ethereum traders saw approximately $10.5 million in liquidations.
This widespread liquidation across the market reflects the volatility and risk that traders face in the crypto space, especially during periods of significant price corrections
Bitcoin waits for US inflation results
Market analysts also attribute Bitcoin’s pullback to broader economic conditions in the United States.
Analysts at Bitfinex noted that Bitcoin investors have adopted a cautious stance ahead of the US Consumer Price Index (CPI) release. The CPI tracks the average price change paid for goods and services. It is a vital measure of inflation and reflects a currency’s purchasing power.
The analysts told CryptoSlate that:
“With core inflation expected around 3.0–3.1% YoY, a hotter-than-expected print (e.g., core >3.2%) could delay Fed easing, dampen market sentiment, and raise borrowing costs. This would strengthen the dollar and hurt demand for non-yielding assets like Bitcoin, potentially extending the pullback by another 5–10%.”
However, a softer CPI reading could flip the market narrative, especially if headline inflation drops below 2.5% and core trends toward 2.9%. They stated:
“In May, we saw this play out: a cooler CPI print led to a sharp rally across both equities and crypto. A similar outcome today could push Bitcoin back toward $120K+ again especially if ETF inflows remain strong as they have in the past 2 weeks.”
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