The crypto market took a severe hit late Wednesday. At around 11 p.m. Beijing time, Bitcoin broke multiple support levels, plummeting to $70,800; Ethereum tumbled below $2,200. The sudden crash was driven by three converging headwinds: hotter-than-expected inflation data, escalating Middle East tensions, and a political deadlock in Washington delaying a key crypto bill.
PPI Shock Dashes Rate-Cut Hopes
The U.S. Bureau of Labor Statistics reported the February Producer Price Index (PPI) rose 0.7% month-over-month, far above the 0.3% forecast. Core PPI jumped to 3.9% year-over-year. The data underscored sticky inflation, sharply reducing the likelihood of a Fed rate cut in April or even June. Risk assets sold off across the board, with crypto hit hardest.
Middle East Conflict Escalates: Oil Tops $100
Geopolitical risk surged as Israel's defense minister confirmed the elimination of Iran's intelligence chief Esmail Khatib. With Prime Minister Netanyahu authorizing further strikes on Iranian figures without additional approval, the conflict ratcheted up. Crude oil broke above $100 per barrel, triggering a broad risk-off rotation that drained capital from volatile assets like crypto.
Washington Gridlock Stalls CLARITY Act
President Trump is pushing the SAVE AMERICA Act and threatening to veto any other legislation until it passes. This has stalled the CLARITY Act, a long-awaited crypto market structure bill, in the Senate. Analysts say it is unlikely to clear committee before April, delaying regulatory clarity and dampening market sentiment.
Liquidation Carnage: $300M in 4 Hours
According to CoinGlass, the past four hours saw nearly $300 million in total liquidations across all exchanges. Longs accounted for $274 million of that total, while shorts contributed roughly $26 million. Over 110,000 traders were forcibly closed out, with long positions bearing the heaviest losses.
The market remains fragile. If macro and geopolitical pressures persist, Bitcoin and Ethereum could test even lower support levels in the coming days.