The crypto market crash continued today, Aug. 29, as liquidation doubled, the preferred Federal Reserve inflation gauge remained sticky, and Bitcoin formed a risk pattern. 

Bitcoin (BTC) crashed below the important support level at $110,000 for the first time in weeks, while the market capitalization of all cryptocurrencies fell to $3.78 trillion. 

Crypto market crash triggered by surging liquidation

One of the main reasons why Bitcoin and altcoins are falling today is that liquidations surged by 102% in the last 24 hours to $529 million, while open interest remained above $200 billion. 

Bullish Ethereum (ETH) liquidation jumped to $190 million, while Bitcoin and Solana (SOL) rose to over $40 million in this period. Liquidations happen when crypto exchanges like Binance and OKX are forced to close loss-making leveraged trades to protect their capital. 

The forceful closure of cryptocurrencies and the manual profit-taking among traders often lead to more selling pressure, dragging prices.

Bitcoin and altcoins are falling as inflation remains elevated

Meanwhile, macro data released today shows that US inflation remained stubbornly high in July. The closely-watched core personal consumption expenditure data rose 0.3% in July, while the headline figure rose 0.2%. 

This increase translated to an annual increase of 2.9% and 2.6%, respectively. These numbers are higher than the Federal Reserve’s target of 2.0%.