The price of bitcoin (BTC) experienced a sharp decline during the morning hours in the United States on Friday, erasing gains that had propelled the world’s largest cryptocurrency to a peak of $63,500.
Several factors contributed to this reversal, with disappointing U.S. economic data and hawkish comments from Dallas Fed President Lori Logan serving as prominent catalysts. The University of Michigan Consumer Sentiment Survey for May plummeted to 67.4 from its previous reading of 77.2, significantly missing economist forecasts of 76.0. Additionally, one-year inflation expectations rose to 3.5% from 3.2%, exceeding forecasts of 3.2%. These developments come in the wake of Federal Reserve Chairman Jerome Powell’s recent dismissal of stagflation concerns, stating that he observed neither “stag” nor “flation.”
In her remarks, Dallas Fed Chief Logan expressed uncertainties regarding the adequacy of current Fed policy and highlighted “important upside risks to inflation.” Consequently, the U.S. dollar and bond yields experienced slight increases, although the impact on stocks was minimal.
Bitcoin, however, swiftly retreated in response to the news, plummeting by more than 4% from its daily high to reach $60,700 at one point. At the time of reporting, the price had marginally rebounded to $61,000, marking a decrease of 0.6% over the past 24 hours. In contrast, the broader CoinDesk 20 Index showed a modest increase of 0.15% during the same period.
