Bitcoin Plunges to $78,000, Crypto Longs Lose $500 Million as Markets React to Inflation Data

Markets

What to know:

Bitcoin’s price dropped to around $78,000 on Saturday morning in Asia, causing over $500 million in losses for those who had bet on the price going up.

Bitcoin’s price dropped 3.2% in the last 24 hours, according to CoinDesk, wiping out the gains it made over the past week. It had briefly risen above $82,000 before this decline.

Cryptocurrency prices fell today, with Solana dropping 5% to $86.98 and losing 7% of its value over the last week. XRP decreased by 4.3% to $1.41. Ether experienced a larger decline, falling 3.3% to $2,189, bringing its weekly loss to 5.3% – the biggest drop among major cryptocurrencies. BNB fared relatively better, down 3.9% today but still showing a 1.1% gain over the past week. Dogecoin also slipped, decreasing by 4.2% to $0.1095.

Over the past 24 hours, crypto traders experienced $581 million in liquidations, according to CoinGlass data. The vast majority of these losses – $552 million – came from traders who bet on rising prices (long positions), while only $28 million came from those betting on falling prices (shorts). Bitcoin (BTC) accounted for the largest share of liquidations at $189 million, followed by Ethereum (ETH) at $151 million. The single largest liquidation event was a $21.59 million Bitcoin position on the Bitget exchange.

When a lot of borrowing is concentrated on one side of a financial trade, a sudden, large market shift – like a $581 million imbalance – can unexpectedly impact everyone involved, creating a significant disadvantage for those heavily invested.

Stocks experienced a significant drop, with the S&P 500 falling 1.2% in its worst day since March. Semiconductor stocks, which had been leading the market’s recent gains, were particularly hard hit, dropping 4%. Meanwhile, interest rates rose sharply: the yield on 10-year U.S. Treasury bonds exceeded 4.5%, Japan’s 30-year debt reached 4% for the first time, and long-term U.K. bond rates hit a 28-year high. The dollar continued to strengthen, and Brent crude oil finished the day above $105 a barrel.

The throughline is inflation.

Recent reports showing unexpectedly high inflation, along with rising oil prices due to tensions in Iran and disruptions to shipping through the Strait of Hormuz, are leading traders to believe the Federal Reserve is now more likely to raise interest rates instead of lowering them.

Cryptocurrencies had previously anticipated more available funds through 2026, but are now adjusting to the expectation of tighter funding conditions.

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2026-05-16 10:42