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Crypto pares losses on decline fueled by US inflation surge

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Bitcoin and Ether trimmed losses after falling earlier on Sunday as the cryptocurrency complex retreated amid a broader cryptocurrency complex pullback after data showed U.S. inflation hit a new 40-year high.

ther fell as much as 6.4 percent to $1,424.40, its lowest since March 2021, while bitcoin fell as low as $26,876.51, its lowest since May 12.

Virtually all of the top tokens tracked by Bloomberg were down on Sunday, with Dogecoin and Avalanche falling as much as 9.4 and 13 percent, respectively.

But then they showed some signs of life and recovered from their lows as of 11:45 a.m. Sunday in New York, and Ether even briefly returned to positive territory for the day.

Friday’s US inflation data beat expectations, shattering any hopes that rising prices may have peaked.

Stocks fell while two-year government bond yields climbed to their highest levels since 2008.

Bitcoin and other cryptocurrencies have suffered in recent months as the Federal Reserve hiked interest rates, global policymakers ramped up efforts to combat price hikes, and risky assets like tech stocks fell.

Inflation data is helping to fuel the downside and “it’s very likely we see this bearishness continuing into next week, particularly in the [Federal Reserve] upcoming meeting,” said Vijay Ayyar, vice president of corporate development and international at crypto platform Luno.

“If you look at previous bear markets, bitcoin is typically down more than 80 percent, while altcoins are typically down more than 90 percent,” Ayyar said. “If this continues, we could see much lower bitcoin prices over the next month or two.”

Some analysts have said that if bitcoin dips below the high $20,000 level, it could quickly slide lower, with levels like the 200-week moving average near $22,000 and even the 2017 high at $19,511.

According to data from Coinglass, total long crypto liquidations topped $100 million for the third straight day on Sunday, down from $258 million on Friday and $290 million on Saturday.

And the MVIS CryptoCompare Digital Assets 100 Index, a market cap-weighted metric that tracks the performance of the 100 largest tokens, fell to its lowest level since January 2021.

https://www.independent.ie/business/world/crypto-pares-losses-from-decline-fuelled-by-us-inflation-spike-41745333.html Crypto pares losses on decline fueled by US inflation surge

Fry Electronics Team

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