Bitcoin (BTC) fell $1,500 in minutes on May 11, as the latest inflation data from the United States generated mixed sentiment on the economic outlook.
Bitcoin marks new 10-month lows
Data from Cointelegraph Markets Pro and TradingView followed the BTC/USD pair’s decline from $31,500 to abruptly pierce the $30,000 support when the Consumer Price Index (CPI) figures were released.
At 8.3%, the CPI beat estimates by 0.2% but still fell 0.2% compared to last month’s reading.. Naturally, reactions began to focus on the idea that the peak of inflation might have passed.
“It is higher than expected, but it shows the first decline in two years, as last month we saw inflation of 8.5%. It is flattening out and inflation has potentially peaked,” Cointelegraph contributor Michaël van de Poppe wrote. in part of a follow-up tweet.
Prior to the start of trading on Wall Street, crypto markets nonetheless highlighted the prospect of a further decline in equities as major altcoins joined Bitcoin in heading lower. Stock futures also fell.
The mood was already shaky, thanks to the developments surrounding the US dollar stablecoin, TerraUSD (UST), which reduced a large number of positions by losing its dollar peg this week.
The promises of Do Kwon, co-founder of the creator Terra, to rebuild and restore UST linkage published on social networks hours before the CPI data.
“Terra’s return to form will be a sight to behold,” part of the final message in Kwon’s Twitter thread insisted.
His words, however, did not convince everyone, as analyst Dylan LeClair made clear in his response.
luna supply will dilute to infinity to try and reestablish peg, meanwhile shorts pile on driving it into the dirt, meaning it dilutes at lower and lower prices
guaranteed zero
crazy
— Dylan LeClair (@DylanLeClair_) May 11, 2022
luna supply will be diluted to infinity to try to restore stability while bears are piling on it meaning it is diluted at ever lower prices
guaranteed zero
mad
moving whales
For Bitcoin, meanwhile, the picture was hardly more positive than that of Terra.
High-volume investors had put funds into motion in recent days, on-chain analytics resource Whalemap warned, particularly those who had bought BTC for more than $15,000 more than the current spot price.
“Lots of whale activity yesterday,” the firm tweeted along with a graphic showing groups of coins being relocated from wallets.
A lot of whale activity yesterday
Even the best of us were not prepared for drops like
Many whales that have purchased $BTC at 40k-34k prices were moving funds yesterday
ps last bubble is an exchange moving from 1 cold wallet to another so it can be ignored pic.twitter.com/7C2fmB99k1
— whalemap (@whale_map) May 11, 2022
Lots of whale activity yesterday
Even the best of us weren’t prepared for falls like this.
Many whales who bought $BTC at prices of 40k-34k were moving funds yesterday
P.S. the last bubble is an exchange moving from one cold wallet to another, so it can be ignored
As Cointelegraph reported, exchange balances saw a major spike during Bitcoin’s initial trip below $30,000, contrasting with a general buying trend. Previously, foreign exchange reserves had been at their lowest level since 2018.
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