- We have a new rubric “results of the macro-week”
- She sums up the economic calendar
- We will also see what news influenced the BTC charts
Friends, every Monday we compile an economic calendar for you with the announcement of important macro events. Let’s sum up and see what those metrics were. And how they influenced the BTC chart.
So, today Bitcoin is trading at $26,276.33. During the day, its price fell by 4.16%, and liquidations on the market amounted to $144 million. The world’s largest cryptocurrency lost almost 10% in a week.
Ether fell 3.34% to $1,761, down 7.45% for the week. The token fell in the moment to $1744, which is the lowest price since April 3rd.
The drop leader was the Polygon Matic token. It fell almost 16% in a week. It is currently trading at $0.8332, the lowest price since January 8, 2023.
The total capitalization of the crypto market over the past 24 hours has fallen by 2.79% to $1.1 trillion.
The reason for this was not macro data – on the contrary, they were generally favorable for the market. Let’s figure out what’s going on.
On Wednesday, the US released the CPI index. It amounted to 4.9%, which is 0.1% lower than expected. As we wrote in the economic calendar, this is good news. Inflation is a key indicator that the US Federal Reserve takes into account when planning interest rates.
Prominflation and jobless claims in the US
Yesterday the US producer price index (PPI) came out. It posted a 2.3% annual growth rate in April, below the 2.4% forecast. This was the slowest growth rate since January 2021.
Also released yesterday was a report on initial jobless claims. They rose in a week to 264,000, beating expectations and hitting their highest level since October 2021.
Together with PPI, the data point to a slowdown in the US economy. This may prompt the Fed to leave interest rates unchanged in June. The stock market reacted to such news with a slight increase (except for banking shares, which again fell slightly yesterday).
Usually the crypto market grows along with the stock market. So what then caused the fall in bitcoin? This time, not economic factors, but industry news and liquidity games.
FUD on selling BTC
The price of bitcoin began to fall on Wednesday evening on rumors about the sale of cryptocurrencies by the US government. This is a prime example of how FUD can hurt the market.
So, it seemed to a Twitter user with the nickname “beetle” that the United States was selling bitcoins confiscated from the Silk Road marketplace. He didn’t correctly set custom labels for address tracking. And then he sowed a panic that the authorities transferred 10 thousand BTC for sale. Many preferred to quickly sell their coins, and the price of bitcoin at one point collapsed by 5.3%.
Spot trading on Binance also affected the market imbalance. It was “too saturated with short positions”:
Bitcoin network overload
Congestion in the Bitcoin blockchain is fueling the market downturn. This morning quantity pending transactions reached almost 300,000, which is more than six times higher than the figures at the beginning of the week.
Recall that on May 9, the network introduced the BRC-20 token standard, which allows the issuance of fungible tokens through the Bitcoin Ordinals protocol. It caused a surge in activity and overloaded the blockchain.
Concerns about liquidity also contribute to the fall in the BTC rate. Two of the world’s leading market makers, Jane Street Group and Jump Crypto, are ending digital asset trading in the US.
Macro data from China. De-dollarization canceled
And in the end we will give fresh data from China. Since the beginning of the year, you can hear many predictions about de-dollarization – that is, that the dollar will cease to be the world’s reserve currency. These speculations are fueled by rumors of a weakening dollar index and a US debt crisis. Experts considered the Chinese yuan to be the main competitor. But there is one problem – from 2022, almost no one buys Chinese bonds.
Here are graphs of the volume of purchases of bonds in comparison with the public debt of China. Since January 2022, they are in the negative value.
Therefore, the chance that the yuan will take the place of the dollar does not look plausible. And as we remember, a strong dollar hinders the growth of bitcoin.
However, without China, the US financial system has its own problems. One of the main ones is the constant increase in the US debt limit. President Joe Biden and senior lawmakers were scheduled to negotiate today to raise that ceiling. But they have been postponed until early next week as talks have so far made little headway.
Potentially, failure in the negotiations could weaken the dollar and strengthen the crypto asset market. But since they were postponed, such news will play a role from Monday. So follow our news and wait for the fresh economic calendar.
We wish you all a nice weekend.