The crypto market lost nearly $90.3 billion in one hour on May 16, pushing Bitcoin to $77,678 and causing mass liquidations across the board.
Summary
- PPI inflation data came in 6% higher than forecast, killing expectations for a rate cut and sending risk assets into sharp selling.
- BlackRock’s IBIT shed $136 million as US spot Bitcoin ETFs posted $290 million in outflows, ending a six-week inflow streak.
- About 154,000 traders were liquidated in 24 hours, clearing about $696 million from the exit market.
The crypto market lost 90.3 billion dollars in market capitalization in less than an hour on May 16, the total valuation decreased by 3.37% to almost $ 2.59 trillion. Bitcoin (BTC) fell to $77,678 while Ethereum (ETH), XRP (XRP), Solana (SOL), and Dogecoin (DOGE) each posted losses between 3.5% and 6%.
The sale was not crypto-specific. It was run by a multiplier event of huge amounts spilled over global risk assets.
New US PPI data released this week came in about 6% above analyst forecasts, the highest reading since December 2022, according to official data. The CPI for April has already printed at 3.8%. Together, the bullish and bullish prints effectively ended hopes of a near-term rate cut by the Federal Reserve, with the CME FedWatch showing a more than 44% chance of a rate hike in December. Traders sell dangerous goods quickly.
Bitcoin recently tracked the iShares Russell 2000 ETF (IWM), which tracks US small-cap stocks that are highly sensitive to valuation expectations. As small caps fell sharply on the inflation data, Bitcoin followed without delay.
Institutional sales combined with macro hit
US spot Bitcoin ETFs recorded $290 million in outflows on the day, ending a six-week inflow streak. BlackRock’s IBIT led the withdrawal of approximately $136 million in the arrangement. Total Bitcoin ETF outflows last week reached nearly $1.15 billion, according to SoSoValue data.
Analyst Ali Martinez posted on X that Bitcoin miners sold about 800 BTC worth about $64 million in the past four days, adding more supply pressure at the wrong time. “This increase in selling pressure may soon have an impact on price action,” Martinez warned.
A combination of heavily driven selling and institutional redemptions removed two of the most sought-after layers at once, leaving the market exposed to long positions built up during recent inflows.
The elimination hastened the decline
When prices started to fall, the derivatives market increased the movement. According to CoinGlass data, about 154,000 traders were liquidated in 24 hours, wiping about $696 million from the exit market. Bitcoin liquidations alone rose 125% to over $235 million. Total crypto exit open interest fell by more than 25% as traders quickly exited limited positions.
Crypto trader Ted Pillows warned on X that Bitcoin broke below a major multi-month ascending channel during the daily period, with two consecutive red candles confirming a breakdown. “If BTC loses the level of $78,000 here, it may quickly drop to $74,000-75,000,” he said.
Analysts say that the technical break, if sustained, opens the door to a deeper correction, with the $70,000–$68,000 region cited as the next logical target.
Altcoins have lost more than Bitcoin. XRP, Solana, BNB, Hyperliquid, Zcash, Dogecoin, Chainlink, and Cardano all posted significant declines as market sentiment shifted clearly to risk-on, in line with a broader pattern seen each time big data turned hawkish this year.
