Bitcoin, $300 Million in Long Positions Evaporate on Price Shock...Is a Bigger Drop Coming?

▲ Bitcoin (BTC), Cryptocurrency Decline/AI Generated Image

Bitcoin (BTC) fell below $79,000 as a surge in the US Producer Price Index (PPI) coincided with geopolitical tensions, leading to the liquidation of $304 million in long positions in the cryptocurrency market.

Bitcoin.com News reported on May 13 (local time) that Bitcoin dropped to $78,704 during intraday trading, falling below the $79,000 mark for the first time since May 4. Bitcoin had previously moved above $81,000, but investor sentiment for risk assets quickly cooled as US wholesale price increases were steeper than expected.

This decline represents a drop of approximately $3,000 from the high of $82,145 recorded on May 11. According to the article, the downturn began after the administration of US President Donald Trump rejected Iran's counter-peace proposal. As Trump described the US-Iran relationship as “on life support,” inflation data reportedly further fueled investor anxiety.

A Bitunix analyst diagnosed that energy-driven price shocks are once again emerging as a key pressure point in the US inflation structure, with pressure spreading to housing, services, and broader consumption sectors, regarding the recent Consumer Price Index (CPI). He stated, “The data suggests that despite two years of tight monetary policy, US inflation has not returned to a stable path.”

The Producer Price Index (PPI) surged by 1.4% in April 2026, reaching 6%, and in the market, expectations for interest rate cuts receded, with even the possibility of further rate hikes being discussed. However, Polymarket and Kalshi showed that the likelihood of the US Federal Reserve (Fed) freezing the benchmark interest rate in June was almost 100%. Boston Federal Reserve President Susan Collins warned that some policy tightening would be necessary to return inflation to 2% in a timely manner.

The decline in Bitcoin led to large-scale liquidations in the derivatives market. According to Coinglass data, Bitcoin long position liquidations amounted to $94 million, which was $37 million more than the previous day. Across the entire cryptocurrency market, $304 million in long positions and $71 million in short positions were liquidated. The combination of interest rate burden and inflation shock reinforced the trend of limited upside potential for risk assets like tech stocks and Bitcoin.

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