Bitcoin, Ether fall, Polygon leads losers; U.S. equities gain as inflation slows

Bitcoin, Ether fall, Polygon leads losers; U.S. equities gain as inflation slows

Time Stamp: July 12, 2023 9:56 PM
Bitcoin, Ether fall, Polygon leads losers; U.S. equities gain as inflation slows PlatoBlockchain Data Intelligence. Vertical Search. Ai.

Bitcoin dropped in Thursday morning trading in Asia to below US$30,500, as the U.S. government’s potential sale of Bitcoin seized from a Silk Road theft exerted pressure on the token. Along with Bitcoin, Ether and most other top 10 non-stablecoin cryptocurrencies also logged losses, with Polygon’s Matic leading the losers. U.S. equity futures rose after data showed that U.S. inflation slowed in June. Nonetheless, analysts ramped up their expectations for another interest rate hike in July. 

Crypto prices drop despite inflation slow down

Bitcoin dropped 0.81% over the last 24 hours to US$30,375 as of 07:20 a.m. in Hong Kong for a weekly loss of 0.35%. Following the release of the U.S. consumer price index (CPI), the world’s biggest cryptocurrency reached a high of US$30,959 on Wednesday night in Asia. However, it soon retreated below US$30,500, according to data from CoinMarketCap.

Bitcoin wallets linked to the U.S. Department of Justice (DOJ) moved over 9,800 Bitcoin worth around $300 million to unused addresses in a flurry of transactions on July 12, according to data from Blockchain.com. The move likely exerted further pressure on the token — as has been the case with other large transfers in the past. 

In 2021, the DOJ seized around 50,000 Bitcoins stolen from the Silk Road darknet marketplace. It is unclear if Wednesday’s transferral between wallets will lead to the U.S. government selling the seized Bitcoin. 

Ether dipped 0.43% to US$1,870, losing 2.15% for the week. Like Bitcoin, the token rose Wednesday night, briefly breaching the US$1,900 resistance level. However, it soon retreated back.

Most other top 10 non-stablecoin cryptocurrencies logged losses in the past 24 hours. The exception was Tron’s TRX token, which gained 0.51% to US$0.0777 and moved up 1.05% for the week. 

Although the CPI data on Wednesday pointed to a slow down in the rate of U.S. inflation, it still may not change the course of the Federal Reserve’s monetary tightening policies. 

According to Justin d’Anethan, head of APAC business development at Belgium-based crypto market maker Keyrock, the new data conforms to expectations and is still far from the Fed’s target to bring the inflation rate to within 2%. It is therefore not enough to boost sentiment in the crypto market.

“Core inflation data came through in the US, a piece of news that most traders were eagerly waiting for but, somehow, which didn’t generate any strong reaction,” d’Anethan said.

On the crypto side,  “investors just aren’t confident enough about prices to gear things down or up and would rather wait for a change of pace in macro markets and the Fed’s rate decision or some powerful crypto-focused catalysis — which just hasn’t come yet,” he added.

Polygon’s Matic led the losers, falling 2.24% to US$0.7248, although it still registered a weekly gain of 8.25%. 

Despite the latest dip, Matic enjoyed a rally of over 15% in the past two weeks. The rise reflects investor optimism in the Polygon network’s Polygon 2.0 upgrade, which the company says will include improved network performance and a transition to “greater community governance of the protocol and treasury.” 

However, the token has some major losses to make up. It is still over 50% down from its 2024 peak of US$1.55 on February 18.

The total crypto market capitalization fell 0.71% in the past 24 hours to US$1.18 trillion, while trading volume rose 13.59% to US$31.02 billion.

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