The cryptocurrency market has been experiencing a significant downturn, with Bitcoin leading the way by retracing to the $65,000 mark after failing to retest its all-time high of $73,700 reached in March.
Market expert Michael van de Poppe has shed light on the reasons behind this ongoing bloodbath, highlighting several key factors that have contributed to the current state of the market.
Crypto Market Battles Uncertainties
A key event highlighted by van de Poppe is last Wednesday’s release of the Consumer Price Index (CPI) data, which has a major impact on the Federal Reserve’s decision on interest rates.
The data, which came in lower than expected, favored risk assets. A lower-than-expected headline CPI of 3.3% (vs. 3.4% expected) and core CPI of 3.4% (vs. 3.5% expected) pointed to potential rate cuts or a positive outlook for future rate cuts, providing favorable market conditions.
Related Reading
Another significant event was the release of the Producer Price Index (PPI) data, which provides inflation data from the producer’s perspective. The data revealed a lower-than-expected regular PPI score of 2.2% (versus an expected 2.5%) and Core PPI Y/Y score of 2.3% (versus an expected 2.4%).
Additionally, the monthly data showed negative figures, further favoring risk-on assets. However, van de Poppe contends that despite these positive indicators, the crypto market has continued its downward trend.
According to van de Poppe, the release of consumer sentiment data on Friday also impacted the market. Consumer sentiment is considered a market leader and a gauge of market strength or weakness. The data came in lower than expected, with a score of 65.6 (versus an expected 72.1).
This data signaled a lack of economic strength, potentially fueling bullish sentiments for risk-on assets and a shift toward crypto-native markets.
However, Federal Reserve Chairman Jerome Powell delivered an unexpectedly hawkish speech. Despite data pointing towards the need for rate cuts and worsening economic conditions, Powell maintained a hawkish tone and revised the potential rate cuts in 2024.
According to Michael van de Poppe, this outlook did not bode well for the markets, adding to existing uncertainties and the notorious price volatility seen in recent days.
Bitcoin Price’s Struggle Continues As Bond Yields Drop
The analyst further pointed out that Market indicators, such as Treasury Bond Yields, declined. The 2-year Treasury Bond…
Click Here to Read the Full Original Article at NewsBTC…
