Bitcoin fell to lows of $27,682 on May 11, dropping beneath the $30,000 for the second time this week after new inflation data indicated that consumer prices were still at 40-year highs. At the time of publication, The price of bitcoin was last down 7% at $29,106, according to CoinMarketcap. The second-largest cryptocurrency, Ethereum fell more than 10% to touch lows at $2000 and traded at $2083 at press time.
Alternative cryptocurrencies known as Altcoins suffered severe losses with nearly all crypto assets trading in the red. Several large-cap altcoins recorded losses between 25% and 40%. Binance Coin (BNB), Solana (SOL), Cardano (ADA), XRP (XRP), Shiba Inu (SHIB), Dogecoin (DOGE), and several altcoins have experienced significant pullbacks in the past 24 hours.
Cryptocurrencies dropped alongside the equities market after the Bureau of Labor Statistics reported that consumer prices for April rose 8.3%, which was slightly higher than expected by economists polled by Dow Jones.
Investors were spooked, causing them to exit risk assets including crypto. Cryptocurrencies remain highly correlated with the S&P 500 and, more recently, the Nasdaq Composite. Investors are also digesting bearish news from the Terra project, with the LUNA token crashing beneath $1 while tumbling nearly 100% from all-time highs of $119 reached on April.5. Terra UST also plunged to as low as $0.26 after breaking its $1 peg. The algorithmic stablecoin is meant to be backed by a combination of crypto assets, including bitcoin.
According to CoinGlass, there have been nearly $1 billion in liquidations across the crypto market during the last 24 hours. Bitcoin led the liquidation pack at $263 million, followed by Ethereum at $232 million. Terra’s Luna also suffered liquidations of nearly $143 million.
Here’s What Might Be Next
Pentosh predicts a price range of $19k-$24k for Bitcoin in June, ‘’Hate to say it but 19-24k in June probably for $BTC.I don’t know if we go straight there or bounce first but the damage from the events this week is likely to result in assets being liquidated for USD, and the Fed balance sheet run-off commencing in June to add more pressure’’
Cryptoanalyst cum economist, Alex Kruger says ‘’BTC and ETH following equities around. Brutal whipsaw. If equities back to the pre-CPI level can see a major squeeze happening’’.
Speaking on the massive Altcoin declines, cryptoanalyst Michael van de Poppe says’’Altcoin capitulation is literally what’s happening today, with several altcoins down 30-50%. First reaction on CPI data was a bearish one, but now the markets are reversing’’.
He continues ‘’My outlook on Bitcoin. First we dropped on the CPI data -> fake move. Back up, including U.S. Indices. Expecting a slight correction here, after which we’ll take the high at $32.6K, resulting in a move towards $34.5K and maybe higher as relief’’.