Crypto Slide Spurs $1B Leverage Flush, But It’s a Healthy Pullback, Analysts Say

Despite the largest long liquidation since early August, the overall outlook for the cryptocurrency rebound remains positive.

• Bitcoin’s pullback from record highs to $118,000 rippled through the crypto market, triggering over $1 billion liquidations across digital assets.
• The sell-off marks a healthy profit-taking, not a reversal, as Fed rate-cut hopes and ETF inflows still support bullish momentum, analysts said.
• Rising core inflation data and stretched valuations pose near-term risks, but institutional demand for crypto remains strong.

Crypto prices slipped Thursday after an unexpectedly hot PPI inflation print, but analysts said it’s just a pullback within the rally.

Bitcoin’s (BTC) rush to new all-time highs over $124,000 was fueled by rising expectations for Federal Reserve interest-rate cuts in September coupled with surging ETF inflows and institutional adoption.

Still, late bulls were punished for their exuberance. The shakeout triggered a massive leverage flush, liquidating over $1 billion in leveraged trading positions across all crypto derivatives over the past 24 hours, mostly longs betting on rising prices, CoinGlass data shows.

That’s the largest long liquidation since at least the late July–early August plunge. That time, BTC dipped below $112,000 and many altcoins saw double-digit pullbacks, eventually carving out the local bottom for most of the digital asset market.