Pakinomist – The US reported a higher-than-expected consumer price index (CPI) for December, showing a seasonally adjusted 0.4% month-on-month increase, beating the 0.3% forecast. The annual CPI rate rose to 2.9%, the highest since July 2024, marking its third consecutive monthly increase.
The markets, both traditional and cryptocurrency, embraced the news with positivity. And what a move it was as the price of literally jumped over 2% in a matter of minutes.
Other popular cryptocurrencies such as showed even more crazy dynamics with a gain of 3.5% in one minute. We are talking about a multi-billion dollar asset, and such a rapid price change is not even worth millions, but billions of dollars, so it is analogous to an earthquake.
For a certain group of investors – the sellers or bears, as they are also called – it was actually a bit like that.
Broken Bears: What’s Next?
As it became known thanks to data from CoinGlass, the amount of short positions liquidated since the CPI release totaled $87.23 million, which is three times more than the amount of longs. In total, the liquidation of short positions amounted to $250 million, or a whopping quarter of a billion dollars, in just 24 hours.
What is 63% of that? Shorts and most of them were liquidated after CPI.
Among the best bear exterminators are traditionally Bitcoin and , and this time XRP also reached the top. As the third largest cryptocurrency, XRP jumped as high as $2.90 and liquidated over $14 million in shorts alone. To put that in perspective, Bitcoin made $39 million and Ethereum made $28 million.
Where the market goes from here is yet to be seen. All the big news from January, at least on the monetary policy side, has happened. Impending is the resignation of Gary Gensler, the current SEC chairman, in five days, and a change in the US administration.
This development could introduce new dynamics for cryptocurrencies such as Bitcoin, Ethereum and XRP, leaving investors to speculate whether bullish or bearish trends will dominate in the coming weeks.
