Crypto Market Plummeting: $90 Billion Wiped Out in Single Hour

The crypto market experienced a sudden and dramatic decline on May 16, as the value of all digital assets plummeted by nearly $90 billion in a single hour. This massive sell-off sent shockwaves throughout the industry, with Bitcoin dropping to around $77,678 and several altcoins experiencing losses ranging from 3.5% to 6%.

The primary driver behind this downturn was the release of new PPI inflation data, which came in significantly higher than expected. This unexpected increase effectively ended hopes for near-term Federal Reserve rate cuts, causing a sharp sell-off in risk assets. The impact on Bitcoin was particularly pronounced, as it has historically tracked small-cap U.S. stocks that are highly sensitive to rate expectations.

The combination of macro-driven selling and institutional redemptions removed two major demand layers from the market, leaving it vulnerable to leveraged long positions built during the recent inflow streak. As a result, the derivatives market amplified the move, with nearly 154,000 traders being liquidated over 24 hours. This led to a total loss of around $696 million in the derivatives market.