Bitcoin Slides to $77,678 After Hot U.S. Inflation Data Hits Risk Assets
Bitcoin and the broader crypto market sold off after U.S. inflation readings came in stronger than expected, pressuring global risk assets, CoinDesk reported. On May 16, total crypto market capitalization fell about $90.3 billion in under an hour to roughly $2.59 trillion. Bitcoin briefly dropped to $77,678. Ethereum, XRP, Solana and Dogecoin each fell between 3.5% and 6%.
Inflation surprise dims rate-cut hopes
The move extended beyond crypto. The latest U.S. PPI was reported to be about 6% above market expectations, the highest since December 2022. April CPI was previously reported at 3.8%. Two back-to-back firmer inflation prints have reduced expectations for near-term Federal Reserve rate cuts. CME FedWatch data shows the probability of a Fed rate hike by December has risen above 44%, prompting capital to rotate out of higher-risk assets.
Spot Bitcoin ETFs flip to outflows
Institutional flows added to the pressure. U.S. spot Bitcoin ETFs posted a combined net outflow of around $290 million on the day, snapping a six-week streak of net inflows. BlackRock's IBIT recorded about $136 million in outflows. SoSoValue data shows Bitcoin ETFs saw roughly $1.15 billion in net outflows over the past week. Analyst Ali Martinez said Bitcoin miners sold nearly 800 BTC over the past four days, worth about $64 million at current prices, adding to spot selling pressure.
Derivatives liquidations accelerate the drop
As spot prices weakened, forced selling spread through derivatives. CoinGlass data shows nearly 154,000 traders were liquidated over the past 24 hours, with total liquidations around $696 million. Bitcoin-related liquidations exceeded $235 million, up 125%. Over the same period, total crypto derivatives open interest fell more than 25%, signaling widespread closure of leveraged positions.
Altcoins underperform
With risk appetite fading, major altcoins declined more than Bitcoin. XRP, Solana, BNB, Hyperliquid, Zcash, Dogecoin, Chainlink and Cardano posted steeper losses. The report attributed the correction to a combination of macro-driven risk-off sentiment, ETF redemptions and leveraged liquidations, which weakened near-term demand and exposed crowded long positioning built during the prior inflow phase.
