Bitcoin falls back under $30K, but has broken the crucial support level from last week and is now on track for a major correction. The US CPI shows signs of inflation peaking in September at 8.3%.
The “u.s. inflation data crypto” is a topic that has been trending in the news recently. The 8.3% US CPI shows signs of peaking, while Bitcoin falls back under $30K.
On May 11, Bitcoin (BTC) fell by $1,500 in minutes as the latest US inflation statistics revealed mixed opinion on the economy.
1 hour candle chart of BTC/USD (Bitstamp). TradingView (source)
Bitcoin drops to new 10-month lows.
BTC/USD dropped from $31,500 to pierce $30,000 support after the Consumer Price Index (CPI) estimates were released, according to data from Cointelegraph Markets Pro and TradingView.
CPI beat expectations by 0.2 percent at 8.3 percent, but declined 0.2 percent from last month’s reading. Natural reactions centered on the possibility that peak inflation had passed.
“This is greater than expected, but it is the first decline in two years, since we had 8.5 percent inflation last month. Flattening, and maybe a peak in inflation, “In part of a follow-up tweet, Cointelegraph writer Michal van de Poppe said.
Prior to the opening of Wall Street trade, crypto markets hinted at the possibility of new equities drop as major cryptocurrencies joined Bitcoin in falling. Futures on stocks were also down.
The tone was already unstable, due to the events surrounding TerraUSD (UST), a U.S. dollar stablecoin that lost its USD peg this week, causing massive losses.
Do Kwon, co-founder of maker Terra, pledged on social media to rebuild and restore the UST peg hours before the CPI data was revealed.
“Terra’s return to form will be a sight to see,” Kwon said in his Twitter thread’s last post.
However, as analyst Dylan LeClair pointed out in response, his remarks did not persuade everyone.
To restore the peg, luna supply will dilute to infinity, while shorts pile on, forcing it into the soil, meaning it will dilute at lower and lower prices.
@DylanLeClair_ — Dylan LeClair (@DylanLeClair_) May 11, 2022
Whales in motion
Meanwhile, the situation for Bitcoin was marginally better than it was at Terra.
Terra’s’rescue plan’ is still on the loose as LUNA goes below $5 and Bitcoin reaches ‘$138K’ in UST.
Whalemap, an on-chain analytics site, cautioned that large-volume investors have placed money on the move in recent days, particularly those who had acquired BTC for more than $15,000 more than the current market price.
“Yesterday, there was a lot of whale activity.,” the company said in a tweet that included a graph showing clusters of money being moved from wallets.
Yesterday, there was a lot of whale activity.
Even the most prepared among us were caught off guard by dumps like this.
Many whales who bought $BTC at 40k-34k values moved their money yesterday.
p.s. the final bubble is an exchange from one cold wallet to another, so disregard the image. twitter.com/7C2fmB99k1
May 11, 2022 — whalemap (@whale map)
According to Cointelegraph, exchange balances spiked following Bitcoin’s first drop below $30,000, bucking the broader purchasing tendency. Exchange reserves had previously been at their lowest level since 2018.
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The “crypto market eyes recovery ahead of key us inflation data release” is a recent article that discusses the current state of the cryptocurrency market. The article states that Bitcoin has fallen back under $30K and there are signs that inflation has peaked.
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