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Bitcoin Dips Below $27K, Reversing Post-CPI Rally

Bitcoin Dips Below $27K, Reversing Post-CPI Rally

Bitcoin Dips Below $27K, Reversing Post-CPI Rally

The BTC/USD trading pair on Coinbase was trading as low as $26,800 before regaining some ground.

The BTC/USD trading pair on Coinbase was trading as low as $26,800 before regaining some ground.

The BTC/USD trading pair on Coinbase was trading as low as $26,800 before regaining some ground.

AccessTimeIconMay 10, 2023, 6:13 PM
Updated May 10, 2023, 6:43 PM
(Getty Images)
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Bitcoin (BTC) dipped below $27,000 Wednesday midday, reversing a morning jump following the release of mildly encouraging U.S. inflation data.

The BTC/USD trading pair on Coinbase traded as low as $26,800 before regaining some ground, according to TradingView data. The largest cryptocurrency by market capitalization was recently trading at around $27,400, down more than 4% in the past hour and 1.8% in the past 24 hours.

(TradingView)

Coinglass data showed that traders who bet on a price shift liquidated over $47 million in BTC long positions over roughly the past hour versus just over $5 million in BTC short position liquidations. These types of long squeezes tend to push prices lower.

Riyad Carey, research analyst at crypto data firm Kaiko, pointed out that there are still concerns about low liquidity in markets, with BTC's aggregated 2% market depth – a metric for assessing liquidity conditions – hasn't recovered since crypto exchange FTX's collapse last November.

It's "a symptom of illiquidity," he told CoinDesk.

(Kaiko)

BTC’s price initially jumped after Wednesday morning’s Consumer Price Index (CPI) report, released by the Bureau of Labor Statistics, showed that annual inflation slowed to 4.9% in April from 5% in March and less than the forecast 5%. The CPI rose 0.4% on a monthly basis, aligning with expectations and higher than 0.1% in March.

Ether (ETH), the second-largest cryptocurrency by market capitalization, followed a similar pattern, dropping by 1% in the past 24 hours to change hands at around $1,860. The CoinDesk Market Index (CMI), which measures the overall crypto market performance, was down 1% over the past 24 hours.

Equities were mixed on Wednesday midday (ET), with the S&P 500 trading down 0.1% but the tech-heavy Nasdaq edging 0.5% higher. The Dow Jones Industrial Average (DJIA) was down 0.6% for the day.

“The sell-off coincided with a drop in stocks so it could be partially correlation-led,” Lucas Outumuro, head of research at blockchain analytics firm IntoTheBlock, told CoinDesk.

UPDATE (May 10, 2023, 18:37 UTC): Adds Carey comments.

Edited by James Rubin.



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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jocelyn Yang is a markets reporter at CoinDesk. She is a recent graduate of Emerson College's journalism program.


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