PakGazette – The United States reported a higher-than-expected consumer price index (CPI) for December, showing a monthly increase of 0.4% after seasonal adjustment, beating the forecast of 0.3%. The annual CPI rate rose to 2.9%, the highest since July 2024, marking its third consecutive monthly increase.
Markets, both traditional and cryptocurrency, welcomed the news positively. And what a move it was, as the price literally shot up more than 2% in a matter of minutes.
Other popular cryptocurrencies, for example, showed even crazier dynamics, with a gain of 3.5% in one minute. We are talking about a multi-billion dollar asset, and such a rapid change in price is worth not even millions, but billions of dollars, so it is analogous to an earthquake.
For a specific group of investors (the sellers or the bears, as they are also called) it was indeed a bit like that.
Crushed Bears: What’s Next?
As learned from CoinGlass data, the number of short positions liquidated since the publication of the CPI amounted to $87.23 million, three times more than the number of long positions. In total, the liquidation of short positions amounted to $250 million, or a whopping quarter of a trillion dollars, in just 24 hours.
What is 63% of that? Shorts, and most of them were settled after the CPI.
Top bear busters traditionally include Bitcoin and Bitcoin, and this time XRP also made it to the top. As the third-largest cryptocurrency, XRP jumped as high as $2.90, liquidating over $14 million in shorts alone. To put that in perspective, Bitcoin made $39 million and Ethereum made $28 million.
It remains to be seen where the market goes from here. All the important news of January, at least as far as monetary policy is concerned, has already happened. Next up is the resignation of Gary Gensler, current chairman of the SEC, in five days, and a change in the US administration.
These developments could introduce new dynamics for cryptocurrencies like Bitcoin, Ethereum and XRP, leaving investors speculating whether bullish or bearish trends will dominate in the coming weeks.
