Retreat Below $61,000... US Stagflation Concerns [Bitcoin Now]

Stable rally at $65,000
Retracement to early $60,000 range
Consumer sentiment at lowest level in 6 months

Concerns about 'stagflation (economic stagnation accompanied by rising prices)' are growing in the United States, causing Bitcoin prices to retreat below $61,000. Although Bitcoin showed a stable rally last week by reclaiming the $65,000 level, employment indicators remain uncertain as new U.S. unemployment claims hit an eight-month high. Meanwhile, inflation in the U.S. is accelerating again, freezing consumer sentiment at its lowest level in six months.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 1:10 PM on the 11th (Korean time), Bitcoin was trading at $60,766.51, down 3.3% from the previous day. Compared to a week ago, it fell 3.21%, and compared to a month ago, it dropped 13.92%. However, it has risen 121.08% compared to a year ago.

Bitcoin prices started at around $62,000 on the 5th, rebounded, and recovered the $65,000 level on the 6th. Afterward, the price turned downward again, and from the afternoon of the 10th until early morning of the following day, volatility increased, breaking below the $61,000 level. In the early morning, the intraday low even dropped to $60,208.78.

The sudden price weakness was due to a large outflow of funds. In fact, according to CoinGlass as of 5:30 PM local time on the 10th, more than $150 million worth of positions were liquidated in the cryptocurrency market within a day. Over $90 million in long (buy) positions and more than $60 million in short (sell) positions were liquidated, totaling over $51 million.

This trend is closely linked to concerns about the U.S. macroeconomic environment. According to the University of Michigan, the preliminary one-year expected inflation rate for U.S. households in May was 3.5%, the highest since November last year. This is 0.3 percentage points higher than the 3.2% recorded the previous month. The preliminary U.S. consumer sentiment index for May was 67.4, down from 77.2 in April, and lower than experts' forecast of 76.

On the other hand, the U.S. remains cautious about cutting the benchmark interest rate. Lori Logan, President of the Federal Reserve Bank of Dallas, said on the 10th (local time), "It is unclear whether monetary policy is sufficiently tight to bring inflation down to the Federal Reserve's target of 2%, and because price pressures remain too strong, it is too early to cut interest rates."

Cryptocurrency specialist CoinDesk noted, "Stagflationary U.S. economic indicators and hawkish remarks from U.S. authorities appear to have affected the optimistic sentiment." Another crypto news outlet, CoinGape, also diagnosed that "Bitcoin prices are struggling to maintain bullish momentum due to the tight economic conditions in the U.S."

According to cryptocurrency data provider Alternative, the Fear & Greed Index representing investor sentiment was 53 points (greed) as of that day. Last week, it recorded 67 points (greed). Alternative's Fear & Greed Index ranges from 0, indicating extreme fear and pessimism about investing, to 100, indicating strong optimism.