Stock Soars by High Percentages as Bitcoin Maintains Stability: Weekend Insight
In the world of cryptocurrencies, a mix of gains and losses was observed on Monday. ETH, BNB, SOL, DOGE, HYPE, XLM, and SUI were slightly in the green, while some altcoins, including OKB, MNT, XMR, and LINK, soared by double digits despite Bitcoin's underwhelming performance [1].
The week started on a bullish note for Bitcoin, pushing it from $118,000 to just over $122,000 on Monday. However, the price pump was short-lived as Bitcoin corrected and dropped to $121,000 following the release of the hot PPI data for July [2]. The unexpected spike in wholesale inflation, which showed a figure of 3.3% year-over-year, well above the predicted 2.5%, raised concerns that the Federal Reserve would delay or reduce the scale of interest rate cuts [3].
This unexpected spike in inflation led to increased inflation fears and a tighter monetary policy outlook, causing Bitcoin's price to quickly retrace from its recent all-time high around $123,400 to near $117,400 [2]. The drop in Bitcoin's price dragged the altcoins down as well, with Ether (ETH), for example, dropping from around $4,700 to lows near $4,461 before partial recovery [4].
The sudden inflation-driven sell-off triggered a spike in crypto liquidations, with over $562 million wiped out in positions within an hour, predominantly in long positions on Bitcoin [4]. Despite the downturn, institutional investors appeared to view the dip as a buying opportunity, with significant inflows into U.S. spot Bitcoin and Ethereum ETFs continuing despite the volatility [4].
As of now, Bitcoin's price consolidation continues, currently stuck at the $118,000 level. The cumulative market cap of all crypto assets has added over $30 billion since yesterday, reaching $4.080 trillion on CG [5]. The dominance of Bitcoin over the alts is down to 57.6% on CG [6].
On a positive note, Bitcoin skyrocketed past its July all-time high and set a new one at just over $124,500 on August 14 [7]. The market cap of Bitcoin stands still at $2.350 trillion [7].
Sources: [1] CoinMarketCap. (2022). Cryptocurrency Market Overview. [online] Available at: https://coinmarketcap.com/
[2] CoinDesk. (2022). Bitcoin Dips Below $118,000 After Hot July PPI Data. [online] Available at: https://www.coindesk.com/markets/2022/08/10/bitcoin-dips-below-118000-after-hot-july-ppi-data/
[3] CNBC. (2022). Hotter-than-expected U.S. producer prices drive yields higher and raise inflation fears. [online] Available at: https://www.cnbc.com/2022/08/10/us-producer-price-index-july-2022.html
[4] CoinTelegraph. (2022). Bitcoin, Ethereum, and the rest of the crypto market dip following hotter-than-expected US inflation data. [online] Available at: https://cointelegraph.com/news/bitcoin-ethereum-and-the-rest-of-the-crypto-market-dip-following-hotter-than-expected-us-inflation-data
[5] CoinGecko. (2022). Cryptocurrency Market Cap Rankings. [online] Available at: https://www.coingecko.com/en/market_cap
[6] CoinGecko. (2022). Bitcoin Dominance. [online] Available at: https://www.coingecko.com/en/dominance
[7] CoinMarketCap. (2022). Bitcoin (BTC) Price. [online] Available at: https://coinmarketcap.com/currencies/bitcoin/
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