Crypto Market Slumps as PPI, Oil Prices, and Liquidations Weigh on Risk Assets
The crypto market continued its downward trend due to higher US producer inflation, rising oil prices, and leveraged liquidations. The 24-hour market volume reached roughly USD 84.3 billion, up about 3.1%, as traders increased activity in response to falling prices.
August's hot PPI reading of 0.4% renewed concerns that inflation remains persistent, increasing expectations for tighter Federal Reserve policy at the September 15-16 meeting. Futures markets priced the chance of a rate increase near 70%, while economists had expected no change. Higher interest rates can support the dollar and reduce demand for speculative assets, including Bitcoin, altcoins, and crypto-related stocks.
Brent crude reached USD 104 after gaining 5% on Thursday, with oil climbing more than 10% during the week to its highest level in 112 days. This pressure can keep inflation elevated, giving the Federal Reserve less room to support risk markets. Leveraged trading added another source of pressure, with over USD 190 million in long positions disappearing within one hour, including over USD 112 million linked to Bitcoin.
Bitcoin traded near USD 77,225 after losing momentum from recent highs, while Ethereum held above USD 2,450 but remained below USD 2,500. XRP fell more than 3% toward USD 1.34, and BNB traded near USD 714. Some tokens still gained despite the weaker market, with Raydium rising more than 27.23%, Ether.fi gaining 9.60%, Aptos advancing 3.64%, and Polkadot adding 2.10%. Zcash fell 13.23% but remained above USD 1,000.