Bitcoin, Ether fall to monthly lows; Polygon leads losers; US stock futures rise as inflation eases
Bitcoin prices tumbled on Friday morning in Asia to below $27,000 amid concerns about shrinking liquidity and network congestion driving up transaction costs. Ether fell below the $1,800 support as all top 10 non-stablecoin cryptocurrencies retreated. Polygon’s Matic led the losers. U.S. stock futures rose as economic data on Thursday indicated that inflation is easing, boosting optimism that the Federal Reserve may halt interest rate hikes in June.
See related article: The Bitcoin network is buckling under the weight of BRC-20’s runaway success
Bitcoin, Ether fall to monthly lows
Bitcoin fell 2.13% to US$26,974 in the 24 hours to 08:30 in Hong Kong, according to CoinMarketCap data, and lost 6.63% for the week. The world’s largest cryptocurrency fell to $26,781 at one point on Thursday, its lowest price since March 28.
Congestion on the Bitcoin blockchain is fueling the slide, with a backlog of pending transactions reaching nearly 300,000 on Friday morning, more than six times the number on May 9. That’s when the BRC-20 token standard was introduced to allow the minting of fungible tokens on the Bitcoin network and generated a surge in activity, according to data from blockchain researcher Jochen Hoenicke.
The jump in transaction volumes has caused concern among Bitcoin developers. Luke Dashjr, a Bitcoin code contributor, emailed the Bitcoin developer community on Monday to suggest blocking the transactions of BRC-20 tokens, which “threatens the smooth and normal use of the Bitcoin network as a peer-to-peer digital currency.”
Bitcoin’s fall also comes amid growing concerns about liquidity. Jane Street Group and Jump Crypto, two of the world’s leading market players, have reportedly ceased digital asset trading in the United States, according to a Bloomberg report on Wednesday.
Ether fell 2.34% to $1,795, for a weekly loss of 4.45%. The token fell to USD 1,774 early Friday, its lowest price since April 3.
The Beacon chain of the Ethereum network in brief stopped validating transactions early Friday morning, with Ethereum developers tweeting later that the power outage had been resolved and the cause was still under investigation.
All other top 10 non-stablecoin cryptocurrencies traded lower. Polygon’s Matic token led the losers, falling 3.75% to US$0.8406 and pulling back 14.45% for the week. The token hit a low of $0.8332 earlier today, the lowest price since January 8, 2023.
The total crypto market cap fell 2.11% in the last 24 hours to $1.12 trillion. Total trading volume fell 17.87% to $37.67 billion.
NFT Indices Fall, Ethereum Sales Crash After Milady Hype
The indices are proxy measures of the performance of the global NFT market. They are managed by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.
In the non-fungible token (NFT) market, the Forkast 500 NFT index fell 1.42% to 3,394.50 in the 24 hours to 10:30 a.m. in Hong Kong, down 7.14% for the week.
NFT sales on the Ethereum blockchain fell 47.62% in the last 24 hours to $17.65 million as the hype for the Milllady Maker NFT collection faded. Milllady Maker sales fell 86.53% to $1.01 million, according to data from CryptoSlam.
NFT trading is slowing due to the recent memecoin hype, with very few new users entering the space, according to Eric Dettman, NFT advisor at CryptoSlam. NFT buyers on the Ethereum blockchain totaled 45,298 in the past seven days, a drop of 72.97%.
Memecoins are also losing steam. The price of Ordi, the memecoin that accounts for more than 60% of the total market capitalization of BRC-20 tokens, has fallen 31.43% in the past 24 hours, according to blockchain data tracker BRC-20.io.
Equity futures gain on slowing inflation data
US stock futures rose as of 11:00 a.m. in Hong Kong. Dow Jones Industrial Average futures rose 0.07 percent. S&P 500 futures rose 0.14%. And Nasdaq Composite futures rose 0.25%. The three U.S. indexes closed mixed in regular trading on Thursday amid investor concerns about banking risks.
The US producer price index (PPI) in April registered an annual increase of 2.3%, lower than forecasts of 2.4% and the slowest pace since January 2021, according to Reuters on Thursday.
U.S. initial jobless claims rose to 264,000 in the week ended May 6, beating expectations and hitting the highest level since October 2021, according to a Thursday Bloomberg report. Along with the PPI, the data points to a slowdown in the US economy, which could prompt the Federal Reserve to leave interest rates unchanged in June.
In U.S. banks, PacWest Bancorp shares fell more than 20% on Thursday, after the California-based lender said its deposits fell about 9.5% in the week ended May 5, sparking fresh concerns for the banking industry after a series of failure of lenders. year.
President Joe Biden and top lawmakers postponed Friday talks on raising the U.S. debt ceiling until early next week, according to CNN Thursday, with negotiations making little progress so far.
The Federal Reserve will decide on June 14 its next move to interest rates, which are now between 5 and 5.25%, the highest since 2006. The CME FedWatch Tool predicts an 87.1% chance that the Fed will keep interest rates unchanged in June, and a 12.9% chance of another rate hike of 25 basis points, up from 3.9% on Thursday.
(Updates with the stock section.)
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