InvestorCryptp.net - The current struggle to maintain bullish momentum for Bitcoin can be attributed to the tightening economic conditions in the US.
The latest inflation data has been a key factor in the sharp decline of BTC price from $63,446 to $60,763 within a few hours. Additionally, the US Bitcoin Spot ETF witnessed a significant outflow on Friday, May 10th, with GBTC contributing over $100 million in negative flow.
Consumer sentiment data from the University of Michigan shows a decrease from 77.2 in April to 67.4 in May, the lowest in six months and below market expectations of 76.
In addition, inflation expectations for next year have increased to 3.5%, the highest in six months from 3.2% in April. Furthermore, the five-year inflation forecast has reached 3.1% from 3.0%.
Meanwhile, new comments from Fed officials have emerged cautiously. Fed's Lorie Logan stated that there is significant risk of inflation increase and it is still too early to consider a rate cut.
We must remain flexible in our policy decisions. Federal Reserve Governor Bowman mentioned the need to maintain policy stability for a longer period.
The Crypto Market Sees Over $50 Million Liquidated in a Few Hours
BTC price dropped more than 4% in a few hours to an intraday low of $60,690. Bitcoin fell from its all-time high of $63,446 as it failed to sustain the upward momentum after the recent breakout.
Ethereum and other altcoins also saw a 2-4% decline. The recent dip has cast doubts on the recovery of the crypto market by the end of this year.
Data from Coinglass shows over $150 million liquidated across the crypto market in the last 24 hours. This includes $90 million worth of long positions liquidated and nearly $60 million worth of short positions liquidated.
Most liquidations occurred within one hour, with over $51 million recorded. More than 54 thousand traders were liquidated, with the largest single liquidation order occurring on the crypto exchange Binance when someone sold BTC for USDT worth $3.56 million.
Senior Bloomberg commodity strategist Mike McGlone stated, "Highly volatile and speculative, cryptocurrencies traded 24/7 are gaining vs. gold the last time S&P 500 e-mini futures crossed above the 50-week moving average in November, but this time Bitcoin/gold cross is falling."
New inflation data has caused the US dollar index (DXY) to rise to 105.40 and US 10-year Treasury yields to surge by 0.055% to 4.504%. While Bitcoin moves in the opposite direction to DXY and Treasury yields, the increase in both has led to the fall of Bitcoin prices to $60k, triggering a crypto market sell-off.
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