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Bitcoin: and: Ethereum: just gave up all the new gains that came after this week’s upbeat CPI report.

Bitcoin, the largest cryptocurrency by market capitalization, has fallen nearly 4% in the last 24 hours and is now just above $17,000 per CoinGecko. Bears have also regained control of Bitcoin on a weekly basis, with the cryptocurrency down 1.2% over the past seven days.

Meanwhile, Ethereum is down nearly 6% over the past day, according to CoinGecko. It’s still about $200 away from falling into triple-digit territory, selling for just over $1,200.

Over $117 million in leveraged positions across the entire market exploded, with Bitcoin and Ethereum accounting for the majority of those positions.

Over the past 24 hours, ETH has seen over $45 million in liquidations, while BTC has seen roughly $33 million. After that, Dogecoin: ($3.3 million) and Litecoin: ($3 million) were the next largest liquidations, according to Coinglass liquidation data.

More than 92% of all liquidations in the last 12 hours were driven out of long positions.

Solutions in the last 12 hours. Source: Coinglass.

The latest carnage comes after Tuesday’s CPI report suggested red-hot US inflation may be cooling.

Bitcoin, Ethereum Reverse After CPI Report

The US Bureau of Labor Statistics said on Tuesday that inflation was indeed still rising by their measure, but the rate at which it rose was slower than last month. This is evidence that the Federal Reserve’s brutal attempts to curb rampant inflation are having an effect.

The Consumer Price Index (CPI) measures the rate of change in the price of a basket of goods, including milk, used cars and medical care. The exchange rate increased by 0.1% in November, which is lower than the rate of increase in these prices in October. At the time, the CPI report indicated that prices rose by 0.3%.

Markets reacted quickly, with stocks and cryptocurrencies both rising on hopes that the Fed’s continued rate tightening will slow.

But with annual inflation still above 7.1%, the Fed’s work is far from over. A day after the publication of the report, the Central Bank signaled that it would continue to raise interest rates, but instead of a 0.75% increase, it returned this figure to 0.5%.

As interest rates rise, money becomes increasingly expensive, which can have a ripple effect on the economy as the Fed tries to slow spending. It also makes holding cash more attractive as interest rates at commercial banks also rise, giving investors less risky returns than entering the stock market.

As such, stocks and cryptocurrencies plummeted. And until inflation returns to below 2%, as the Fed wants, the ongoing crypto bear market shows little sign of returning to new highs.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.

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