What’s The Reason Behind Bitcoin Price Falling Sharply Today?
Highlights
- Bitcoin price fell in response to University of Michigan consumer sentiment and inflation data.
- Inflation expectations for the year and five-year inflation outlook hit a six-month high.
- BTC price fell more than 4% in a few hours to an intraday low of $60,690.
- $50 million were liquidated across the crypto market in one hour.
The Bitcoin price is grappling to retain bullish momentum due to tightening economic conditions in the U.S. The latest data in inflation became the primary reason for a sharp drop in BTC prices from $63,446 to $60,763 within hours. In addition, the U.S. Spot Bitcoin ETFs witnessed major outflows on Friday, May 10 with GBTC accounting for over $100 million negative flow.
University of Michigan consumer sentiment data revealed a fall from 77.2 in April to 67.4 in May, the lowest in six months and also missed market expectations of 76. Furthermore, inflation expectations for the year ahead rises to 3.5%, a six-month high from 3.2% in April. Also, the five-year inflation outlook hit 3.1% from 3.0%.
Meanwhile, new comments by Fed officials came cautious. Fed Lorie Logan said that there are important upward risks to inflation. It is too early to consider a rate cut. We need to be flexible in our policies. Federal Reserve Governor Bowman said that we need to maintain policy stability for a longer period of time.
Crypto Market Saw Over $50 Million Liquidated Within Few Hours
BTC price fell more than 4% in a few hours to an intraday low of $60,690. Bitcoin tumbled from a high of $63,446 as it failed to sustain upside momentum after a recent breakout. Ethereum and other altcoins also fell 2-4%. The recent fall raised doubts about the crypto market recovery later this year.
Coinglass data shows more than $150 million were liquidated across the crypto market in the last 24 hours. Among this, $90 million long positions were liquidated and nearly $60 million short positions were liquidated. Most of the liquidation happened in an hour, which was recorded at over $51 million.
Over 54K traders were liquidated and the largest single liquidation order happened on crypto exchange Binance as someone sold BTC to USDT valued at $3.56 million.
Bloomberg’s senior commodity strategist Mike McGlone said, “Highly volatile and speculative, the 24/7-traded crypto was rising vs. gold the last time the S&P 500 e-mini future crossed above its 50-week moving average in November, but this time the Bitcoin/gold cross is falling.”
The new inflation data caused US dollar index (DXY) to climb to 105.40 and the US 10-year Treasury yield jumped by 0.055% to 4.504%. As Bitcoin moves opposite to DXY and Treasury yields, a rise in both has caused a downfall in Bitcoin price to $60k, triggering a crypto market selloff.
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