Bitcoin Slips Below USD 29,000 As Inflation Bokey Hits Crypto

Bitcoin crashed below the US$29,000 mark for the first time in 10 days on Thursday morning in Asia. Ether also fell to lose its grip on the $2,000 price support in a selloff across all top 10 non-stablecoin tokens. Some commentators attributed the declines to a repricing based on recent concerns about inflation and higher interest rates ahead. Litecoin led the losers. U.S. stock futures fell after Wall Street closed flat to lower Wednesday.

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Fast facts

• Bitcoin fell 4.59% to US$28,943 in the 24 hours to 09:00 a.m. in Hong Kong for a weekly loss of 3.59%, according to CoinMarketCap data. The world’s largest cryptocurrency lost around $1,000 in an hour as of 4:00 PM Hong Kong on Wednesday.
• Ether fell 7.20% to $1,947, but is still 1.93% higher in the last seven days. The token traded below the USD 2,000 mark for the first time since April 13, when the Ethereum blockchain completed its Shanghai upgrade.
• Litecoin led the losers with a 10.50% fall in the last 24 hours to trade at $90.85, down 1.39% for the week.
• The latest sell-off in cryptocurrencies is a delayed correction after the rally this year, with investors taking profits as a risk-off trend emerged in global markets, according to a CNBC report Wednesday citing Joel Kruger, market strategist at currency and crypto platform Lmax Group.
• The risk-off sentiment follows several global inflation signals. Britain on Wednesday reported a 10.1% annual rise in its consumer price index for March, beating estimates for a 9.8% rise. Also this week, Atlanta Federal Reserve President Raphael Bostic and St. Louis Fed President James Bullard said it is too early to consider a rate cut, given the stubborn U.S. inflation rate, which was 5% in March compared to the Fed’s target of 2%.
• Lmax group tweeted on Thursday, the crypto market has “been forced to think seriously about how it has priced” with regards to monetary policy.
• Another downward arrow is US Securities and Exchange Commission Chairman Gary Gensler’s testimony before Congress on Tuesday, which said much of the business model of the cryptocurrency sector has been built around non-compliance with securities regulations.
• The total crypto market capitalization fell 5.04% in the last 24 hours to $1.21 trillion. The total trading volume in the last 24 hours rose 33.08% to 62.36 billion USD.
• In the NFT market, the Forkast 500 NFT Index fell 1.23% to 4,012.98 in the 24 hours to 09:00 in Hong Kong, but remained 0.74% higher for the week. The index is a proxy measure of the performance of the global NFT market and includes 500 eligible smart contracts on a given day. It is managed by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.
• US stock futures were trading lower as of 9:00 a.m. in Hong Kong. The Dow Jones Industrial Average fell 0.11 percent. S&P 500 futures fell 0.24 percent. The Nasdaq Composite Index fell 0.35 percent.
• The three U.S. stock indexes halted Wednesday after softer first-quarter earnings reports, while the Federal Reserve’s Beige Book survey of economic conditions published Wednesday showed a sharp drop in lending following the failure of a trio of regional banks last month.
• Negatives for crypto from banking failures include “decreasing liquidity driven by strong risk-off sentiment and regulatory pressures affecting banking access for the sector,” Ben Ritchie, director of Digital Capital Management AU, said in a report from information services platform Finder.
• US interest rates are currently between 4.75% and 5%, the highest since June 2006. Analysts at CME Group now see a 16.7% chance that the Fed will leave rates unchanged at its next meeting on May 3, while 83 .3% predict a 25 basis point increase, down from 84.8% on Wednesday.
• (Updates to correct Bitcoin price decline in second sentence of first point.)

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