Bitcoin held below $80,000 on Thursday as stronger-than-expected U.S. producer price inflation data sparked a broad risk-off move across markets, triggering liquidations of leveraged bullish positions and renewed pressure on altcoins.

Market Context

The largest cryptocurrency was recently changing hands around $79,800 after dropping to as low as $78,720 on Wednesday. Bitcoin remains below its weekly open of $82,500 and the psychologically key $80,000 level that traders have been watching closely. Risk assets broadly came under pressure after the Producer Price Index rose 6% year-over-year, marking its highest annual level since 2022 and reigniting inflation concerns.

Analysis

Crypto derivatives markets showed signs of stress as the move largely wiped out leveraged bullish bets. The surge in long liquidations indicates that market participants had become heavily positioned for an upside breakout above the 200-day moving average, which sits just above $82,000. With those positions getting cleared, some of the speculative excess has been purged from the system.

Ethereum's open interest reached a record high of 15.42 million tokens earlier today, surpassing the previous peak of 15.33 million set in July. This reflects increasing demand for leverage in what has become a range-bound market, with ETH prices largely oscillating between $2,200 and $2,450 over the past four weeks.

Memecoins led losses as risk-off sentiment rippled across the sector. The CoinDesk Memecoin Select Index tumbled more than 4% since midnight UTC and 10% over the past 24 hours. Meanwhile, of the 100 assets in the CoinDesk 100 index, 75 were in the red on Thursday.

The "Altcoin Season" indicator dropped back to 43/100 after hitting 50/100 on Monday, demonstrating a risk-off mood among crypto investors and suggesting altcoins may face continued headwinds.

Key Numbers

- Bitcoin liquidations totaled $117 million over 24 hours, with $102 million from long positions (87%)

- Total crypto liquidations surged 68% to nearly $400 million

- Futures volume rose 14% to $189 million

- Open interest declined 2% to $133 billion

- Ethereum open interest hit record high of 15.42 million tokens

- Bitcoin held around $79,800, below weekly open at $82,500

- Memecoin Select Index fell 10% over 24 hours

What to Watch

The $75,000 strike bitcoin put expiring on May 29 has emerged as the most actively traded contract on Deribit, signaling downside hedging demand among options traders. The rest of the top five most traded contracts remain call options, suggesting some market participants are still looking for upside exposure.

Both 30-day implied volatility indexes for bitcoin and ether remain subdued despite recent price action and upcoming catalysts such as the Clarity Act markup. Traders should monitor whether open interest continues to decline or stabilizes, which could signal whether the deleveraging process is complete or if further position liquidation lies ahead.