Bitcoin
and other cryptocurrencies fell back on Thursday, giving up gains seen Wednesday after the release of widely celebrated U.S. inflation data. At least one analyst sees the price dynamics as a bearish sign.
The price of Bitcoin has fallen less than 1% over the past 24 hours to $27,450. The largest digital asset jumped to near $28,500 on Wednesday after the release of the U.S. consumer-price index (CPI), but has since fallen back below where it was trading before the CPI data sent cryptos higher. Bitcoin continues to languish below the psychologically important $30,000 zone, which it breached last month for the first time since June 2022 but has failed to reclaim in May.
“The price dynamics are becoming increasingly bearish: the formation of a series of descending highs, a consolidation below the 50-day moving average and a break of the April lows suggest that sellers are dominating,” said Alex Kuptsikevich, an analyst at broker FxPro.
In theory, Bitcoin should have held on to or even extended gains after data showed signs that inflation has been cooling. That’s what happened to tech stocks, with the tech-heavy
Nasdaq Composite
beating the
Dow Jones Industrial Average
and
S&P 500
on Wednesday and set to outperform again on Thursday.
CPI data reaffirmed expectations that the Federal Reserve may not keep hiking interest rates to tame inflation, which should support cryptos and tech stocks, because both are risk-sensitive assets that see dampened demand in a higher-rate environment. It may be a worrying development that a risk-on macroeconomic catalyst failed to push Bitcoin back above technical levels—leaving cryptos vulnerable to the release of more inflation data due later Thursday in the form of the producer-price index (PPI).
Beyond Bitcoin,
Ether
—the second-largest crypto—dropped 1% to $1,820. Smaller cryptos or altcoins were more mixed, with
Cardano
up 2% but
Polygon
slipping 1%. Memecoins were little changed, with
Dogecoin
down less than 1% and
Shiba Inu
hovering around flat.
Write to Jack Denton at [email protected]
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