Bitcoin (BTC) sank back to $23,000 on Friday shortly after the Personal Consumption Expenditure (PCE) price index registered a 5.4% annual increase, and a 0.6% monthly increase, in January.
The higher-than-expected figure means the Federal Reserve’s war against rising inflation will likely continue.
- Bitcoin started at roughly $24,000 on Friday, staying above $23,800 until about 13:30 UST – when January’s PCE figure was released.
- The asset tumbled after that, falling as low as $23,000 within just 30 minutes. It trades for $23,217 at writing time.
- Bitcoin’s fall is coupled with a 3.3% fall for Ethereum (ETH), a 4.6% drop for Cardano (ADA), and a 7.1% drop for Polkadot (DOT). Meanwhile, the NASDAQ and S&P500 have slumped by 1.81% and 1.25% respectively.
- The crypto market pullback has led to over $110 million in liquidations in the past 4 hours alone, according to data from Coinglass. That includes $44 million in BTC liquidations and $22 million in ETH liquidations.
- The largest single liquidation took place on BitMEX, on an XBTUSD trade for $7.52 million.
- The PCE is the Fed’s preferred measure of inflation, rather than the Consumer Price Index (CPI). The former differentiates itself by tracking how consumers change their buying habits over time and is considered by the central bank to be the best predictor of where inflation is headed going forwards.
- The Fed has been raising interest rates since early 2022 in response to some of the highest inflation figures seen in 40 years. While showing progress, Chairman Jerome Powell said earlier this month that more rate hikes are likely to still come.
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