- We have a new “macro week summary”
- This one summarizes the economic calendar
- We also look at what news influenced the BTC charts
Friends, every Monday we compile an economic calendar for you with announcements of important macro events.
Let’s summarize and see what these metrics were. And how they affected the BTC chart.
So, today Bitcoin is trading at $26,276.33. During the day, its price fell by 4.16%, and the liquidation of the market amounted to $144 million.. The world’s largest cryptocurrency lost nearly 10% over the week.
Efir fell 3.34% to $1761, losing 7.45% over the week. The token fell momentarily to $1744, which is the lowest price since April 3.
Leading the drop was the Polygon Matic token. It’s down almost 16% for the week. It is now trading at $0.8332, its lowest price since Jan. 8, 2023.
The total capitalization of the crypto market has fallen 2.79% to $1.1 trillion in the last 24 hours.
The reason for that was not the macro data – on the contrary, it was generally favorable for the market.. Let’s take a look at what’s going on.
Inflation Slowdown
On Wednesday, the U.S. released the CPI. It was 4.9%, 0.1% below forecasts.
As we wrote in the economic calendar, this is good news. Inflation is a key indicator that the U.S. Federal Reserve considers when planning interest rates.
Prominflation and jobless claims in the U.S.
The U.S. Producer Price Index (PPI) came out yesterday. In April, it recorded an annual growth of 2.3%, below the forecasts of 2.4%.. This was the slowest rate of growth since January 2021.
Also yesterday, the report on initial jobless claims came out. They rose to 264,000 for the week, beating expectations and reaching their highest level since October 2021.
With PPI data pointing to a slowing U.S. 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 bank stocks, which fell again slightly yesterday).
The crypto market usually grows along with the stock market. So then, what caused bitcoin to fall? This time, not economic factors, but industry news and liquidity plays.
FUD on BTC sale
The bitcoin price began falling Wednesday night on rumors of a U.S. government sale of cryptocurrencies. This is a prime example of how FUD can hurt the market.
So, a Twitter user with the nickname “beetle” thought the U.S. was selling bitcoins confiscated from the Silk Road Marketplace. He incorrectly set custom labels for address tracking.
And then sowed panic that the authorities transferred 10 thousand BTC to sell. Many chose to sell their coins quickly, and the price of bitcoin plummeted 5.3% in an instant.
Also affected by the market imbalance was spot trading on Binance. It was “overly saturated with short positions (shorts)”:
Bitcoin network overload
Bitcoin blockchain overload fuels market decline. This morning, the number of pending transactions reached nearly 300,000, more than six times the number at the beginning of the week.
Remind that on May 9 the network introduced the BRC-20 token standard, which allows to issue interchangeable tokens via the Bitcoin Ordinals protocol.
It has caused a flurry of activity and overloaded the blockchain.
Liquidity fears
Liquidity fears are also contributing to the BTC plunge. Two of the world’s leading market makers, Jane Street Group and Jump Crypto, are halting digital asset trading in the US.
Macro data from China. De-dollarization is off
And finally, some fresh data from China. Since the beginning of the year, you can hear a lot of predictions about de-dollarization – that is, that the dollar will cease to be the world’s reserve currency.
This speculation is fueled by rumors of a weakening dollar index and the U.S. debt crisis. Experts considered the Chinese yuan to be the main competitor.
But there is one problem – since 2022 almost no one is buying Chinese bonds.
Вот графики объема покупки облигаций в сравнении с госдолгом Поднебесной. As of January 2022, they are in the negative.
So the chance that the yuan will take the place of the dollar does not look plausible. And as we remember, a strong dollar prevents bitcoin growth.
Without China, however, the U.S. financial system has its own problems. One of the main ones is the constant raising of the U.S. debt limit.
President Joe Biden and senior lawmakers were scheduled to negotiate an increase in that ceiling today.
But they have been postponed until early next week as negotiations have made little progress so far.
Potentially, a 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 as early as Monday. So stay tuned and wait for the latest economic calendar.