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Bitcoin's Modest Rally Cut Short, Price Tumbles Back Below $61K
Stagflationary U.S. economic data and hawkish remarks from a Fed speaker appeared to sour the bullish mood.
Updated May 10, 2024, 3:24 p.m. Published May 10, 2024, 3:20 p.m.
The price of bitcoin fell sharply in the U.S. morning hours Friday, reversing a move that had seen the world's largest crypto climb as high as $63,500.
As good of an excuse as any for catalysts were disappointing U.S. economic data and hawkish remarks from Dallas Fed President Lori Logan. The University of Michigan Consumer Sentiment Survey for May tumbled to 67.4 from 77.2 previously. That missed economist forecasts for 76.0 by a mile. Perhaps more disturbingly, one-year inflation expectations rose to 3.5% from 3.2% previously and against forecasts for 3.2%. It was only one week ago when Federal Reserve Chairman Jerome Powell scoffed at stagflation concerns, saying he was seeing neither the "stag" nor the "flation."
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As for the Dallas Fed chief, Logan this morning said there were "uncertainties" about whether current Fed policy is sufficiently restrictive and noted "important upside risks to inflation."
The news combined to send the U.S. dollar and bond yields modestly higher, but had little effect on stocks. Bitcoin, on the other hand, retreated quickly, tumbling at one point more than 4% from the day's high to $60,700. At press time, the price had bounced a hair to $61,000, lower by 0.6% over the past 24 hours. The broader CoinDesk 20 Index is up 0.15% over the same period.
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