The cryptocurrency market recorded a major recession on Friday, causing the major cryptocurrency to lose a major support and fall to fresh monthly lows after a prolonged bullish rally over the past month.

Bitcoin (BTC), which was looking to break the $25,000 resistance last week, fell below $22,000 to hit a new two-week low at $21.747. Ether (ETH), the second largest cryptocurrency, surged above $2,000 in a row to merge but fell 6% in the past 24 hours to hit a new weekly low of $1,726.

After weeks of bullish momentum, the rapid crash also saw the liquidation of 157,098 traders in the last 24 hours, resulting in a total liquidation of over $551 million. Data from Coinglass indicates that Bitcoin traders lost more than $203 million, followed by Ether traders with $140 million.

The following chart shows that liquidated long positions outnumber short positions by a significant margin, indicating that market sentiment was very bullish until the quick crash. The short positions that were liquidated were only $41 million compared to $398 million in the long positions.

Total filter. Source: Coinglass
The long liquidation of BTC futures reached an eight-month high of $84,934,697.05 on OKX, surpassing the previous high of $48,630,183.66 observed on May 5.

Bitcoin futures long liquidation on OKX (formerly known as OKEx). Source: Glassnode
The sudden drop in the cryptocurrency market is attributed to the expected interest rate hike from the US Federal Reserve in September. The August CPI data came in less than expected, leading to a bullish increase in the cryptocurrency and FX markets alike.

Related: Bitcoin ‘Extremely Bearish’ Below $22.5K, Trader Says As Bitcoin Price Drops 6%

Louis Fed President James Bullard said he favors a 75 basis point increase. The Fed’s rate hike next month could trigger another pullback. A similar increase in interest rates of 75 basis points in June caused turmoil in the cryptocurrency market after the initial price hike.

Source: CoinTelegraph