Bitcoin’s price took a significant hit after the release of surprising US inflation data, dropping 3% to a three-week low of $58,900. This decline triggered a wave of liquidations, totaling $196 million and impacting nearly 57,000 traders.
The unexpected inflation figures raised concerns about the Federal Reserve potentially pausing or slowing its rate cuts, which had been seen as supportive for cryptocurrencies. However, Bitcoin managed to recover slightly, gaining 2.84% to trade at $60,602.
The market’s bearish sentiment was further fueled by the ongoing economic uncertainty. Jobless claims reached a 14-month high, and the Consumer Price Index (CPI) showed signs of rising inflation, raising concerns about stagflation.
Regulatory uncertainty also played a role, with the SEC’s lawsuit against Cumberland DRW for allegedly acting as an unregistered cryptocurrency dealer adding to investor concerns.
Despite the overall bearish trend, there was a glimmer of hope as Metaplanet Inc. increased its Bitcoin holdings by purchasing nearly 109 BTC. However, the broader market sentiment remained cautious, with Bitcoin futures and options markets signaling reduced confidence.