Major coins crashed sharply with Ethereum down more than 10% as the global cryptocurrency market cap dropped 10.25% to $1.3 trillion at press time.
|Cryptocurrency||24-Hour % Change (+/-)||Price|
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Why It Matters: On Wednesday, the Labor Department reported an 8.3% rise in the consumer price index in April — an indication that inflation remains hot and near 40-year highs. However, the number moderated from the 8.5% reported in March.
On Wednesday, the yield on 10-year Treasury notes rose 3.1 basis points to 3.025%, while the 2-year paper, an indicator of the Federal Reserve’s rate outlook, hit a three-year high of 2.858%, according to a Reuters report.
Risk assets flashed red after the inflation report with the S&P 500 and NASDAQ down 1.65% and 3.2%, respectively, on Wednesday. At press time, U.S. stock futures rose slightly. Bitcoin traded below the psychologically important $30,000 mark.
“Bitcoin remains very vulnerable to further selling pressure and could see further technical selling if the $28,500 level breaks,” said Edward Moya, a senior market analyst with OANDA, in a note seen by Benzinga.
GlobalBlock analyst Marcus Sotiriou said apart from the macro headwinds there’s a “fundamental risk” to the cryptocurrency industry after Terra USD (UST) lost its peg to the dollar.
“The impact of this event on the wider market is very significant. Soon we will find out which DeFi projects had their treasuries in anchor or UST, hence resulting in prominent protocols going under,” said Sotiriou.
Futures trader and CEO of Factor LLC Peter Brandt said that the volume spike in BTC can be indicative of the “puke-out capitulation and the beginning of the end of the one-year decline.” Brandt said he’s previously mentioned $27,000 as a possible low.
This is the type of volume spike that can indicate puke-out capitulation and the beginning of the end of the one-year decline. Can the carnage continue? Anything is possible — and that includes a local bottom. I’ve mentioned 27,000 area as possible low, and that could be $BTC pic.twitter.com/FnzDn1PHgs
— Peter Brandt (@PeterLBrandt) May 11, 2022
At press time, the 24-hour trading volume for Bitcoin rose 29.3% to $73.42 billion, according to data from CoinMarketCap.
Notably, Brandt had tweeted on April 8 that if Bitcoin goes to $27,111 he would add “laser eyes” to his Twitter picture.
Hey Jeff @VailshireCap
Hope your time @TheBitcoinConf is wonderful
IF (IF, IF, not a prediction) $BTC goes to 27,111 my Twitter picture will be changed — laser eyes will be added pic.twitter.com/ABzgZYhiBS
— Peter Brandt (@PeterLBrandt) April 7, 2022
Cryptocurrency trader Michaël van de Poppe said we’re close to “capitualtion” on the markets.
Capitulation on the markets. We’re close.
— Michaël van de Poppe (@CryptoMichNL) May 11, 2022
Meanwhile, as Ethereum hovers around the psychologically important $2,000 mark, whales have been “extremely active,” according to a tweet from Santiment, market intelligence platform.
#Ethereum‘s whales have been extremely active today, firing off 2,596 transactions valued at $1M or more. This is the highest day of whale transactions since January, and something to monitor if $ETH drops below $2k for the first time since last July. https://t.co/FZoTsFJwEn pic.twitter.com/MVFEpzysxN
— Santiment (@santimentfeed) May 11, 2022