Over $1 billion in leveraged crypto positions faced liquidations within a day due to unexpectedly high U.S. inflation rates that intensified fears of sustained inflation and deferred Federal Reserve rate cuts.

The market experienced a downturn shortly after Bitcoin reached an all-time high of more than $123,500, prompting significant risk reduction among traders. The memecoin Dogecoin saw the steepest drop, falling by 9%, accompanied by declines in Solana (SOL), XRP, and Binance Coin (BNB), which fell between 3-7%.

Liquidation data indicates that $866 million in long positions were wiped out, far exceeding the $140 million in shorts. Ether traders were hit the hardest with $348.9 million liquidated, followed by Bitcoin at $177.1 million. Solana and XRP had $64.2 million and $58.8 million liquidated respectively, while Dogecoin suffered $35.8 million in liquidations.

Jeff Mei, COO at BTSE, remarked that the inflation surprise halted the recent crypto rally and suggested markets might stagnate until more favorable guidance from the Fed is observed.

Nick Ruck from LVRG Research emphasized the broader economic pressures underlining crypto’s recent performance, suggesting that despite these fluctuations, the fundamental factors propelling the current bull market remain intact.