Cryptocurrency markets are experiencing a dramatic sell-off following the release of U.S. Producer Price Index (PPI) data, with over $577 million in liquidations as of press time, including $546.68 million in long positions, wiped out in just the past hour.

The producer price index jumped 0.9% in July versus expectations of just 0.2%, while core PPI also surged 0.9% against forecasts of 0.3%. On an annual basis, headline PPI increased 3.3%, the biggest 12-month move since February and well above the Fed’s 2% target.

Both Bitcoin (BTC) and Ethereum (ETH) were trading at all-time highs within the past 24 hours before reversing sharply. 

BTC has fallen from its record of $124,457.12 to $118,494.20, down 3.93% on the day. ETH has slid from its recent peak to $4,576.79, marking a 3.65% drop over the same period.

The carnage follows wholesale prices rising far more than expected, casting doubt on anticipated Federal Reserve rate cuts and triggering widespread panic selling across digital assets that had been rallying on earlier positive CPI data.

216,613 traders liquidated in 24 hours

Coinglass data reveals the extent of the market destruction, with total liquidations reaching $1.05 billion over the past 24 hours, wiping out positions for 216,613 traders.. Long positions bore the brunt of the selloff, accounting for $780.26 million in liquidations, while short liquidations totaled just $270.90 million.

Indeed, the timing was particularly brutal for crypto bulls who had positioned for continued upside momentum following the favorable CPI data that had initially sparked the rally.

The largest single liquidation occurred on Bybit, with a BTCUSD position worth $10 million being wiped out as prices cascaded lower.

The question now centers on whether the Federal Reserve will maintain its accommodative stance or pivot to a more hawkish position in response to persistent inflationary pressures.

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