Bitcoin’s Modest Rally Cut Short, Price Tumbles Back Below $61K

As a crypto investor, I’ve noticed some disappointing news that could potentially impact the market. The latest U.S. economic data, specifically the University of Michigan Consumer Sentiment Survey for May, came in lower than expected at 67.4 instead of the forecasted 76.0. This decline was driven by a rise in one-year inflation expectations to 3.5% from 3.2%, which is higher than what economists had anticipated. Dallas Fed President Lori Logan’s hawkish remarks didn’t help ease concerns either. Just last week, Federal Reserve Chairman Jerome Powell dismissed stagflation fears, stating that he wasn’t observing any signs of “stag” (economic stagnation) or “inflation.” However, these recent developments could change the narrative.

The Dallas Federal Reserve head, Logan, expressed some doubts this morning over whether the current Federal Reserve policies are tight enough. He also highlighted potential positive risks for inflation.

The convergence of news items caused a modest increase in the U.S. dollar value and bond yields, yet had minimal impact on stock prices. In contrast, Bitcoin experienced a significant decline, dropping as much as 4% from its peak to $60,700 before rebounding slightly to $61,000 – a decrease of 0.6% over the previous day. The CoinDesk 20 Index reported a modest gain of 0.15% during the same time frame.