Unraveling the Factors Impacting Today’s Sharp Decline in Bitcoin (BTC) Value

• Bitcoin’s price is struggling amid new US consumer sentiment and inflation data, with the crypto market seeing $50 million worth of liquidations within just an hour.
• The price fell in response to University of Michigan consumer sentiment and inflation data, with inflation expectations for the year and the five-year inflation outlook hitting a six-month high.
• Bitcoin’s price fell more than 4% in a few hours to an intraday low of $60,690.

Bitcoin’s price struggles amid new US consumer sentiment and inflation data, resulting in a sharp drop in the crypto market. This article explores the reasons behind this trend and its potential implications.

Bitcoin Price Affected by US Consumer Sentiment and Inflation Data

Bitcoin’s 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.

Impact of Inflation Expectations and Consumer Sentiment

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%.

Crypto Market Sees $50 Million Liquidation

Bitcoin’s 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.

Conclusion

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.