The latest CPI data for March released by the US Department of Labor exceeded market expectations, leading to a short-term downturn in the cryptocurrency market. However, whales actively bought in during the market decline, which seemed to have prompted a brief pullback followed by a volatile surge in Bitcoin and Ethereum.
Bitcoin and Ethereum experience temporary pullback before rallying
Whales bought 35.82 million ETH, worth $358.2 million
Longs and shorts battle it out, resulting in $250 million in liquidations in the past 24 hours
Last night at 20:30, the US Department of Labor announced the latest Consumer Price Index (CPI) data, revealing a year-on-year increase of 3.5% and a monthly increase of 0.4% for March CPI in the US. The core CPI also exceeded expectations with a year-on-year increase of 3.8% and a monthly increase of 0.4%.
This further discounted market expectations for a rate cut by the Federal Reserve, leading to a short-term slump in both the stock market and the cryptocurrency market.
According to data from the Binance spot market, Bitcoin dropped 2.05% from $68,972 to $67,560 within 15 minutes of the inflation data being released. However, Bitcoin quickly rebounded and surged again, reaching over $71,000 in the early hours of the 11th before settling at $70,768 at the time of writing, representing a 2.03% increase in the past 24 hours.
The trend of Ethereum mirrored that of Bitcoin, with a 3% slump last night, reaching a low of $3,411.82 before rebounding to $3,546 at the time of writing, a 0.74% increase in the past 24 hours.
In the context of the Federal Reserve potentially delaying the easing of monetary policy, why did the prices of Bitcoin and Ethereum turn upwards? On-chain data suggests that it may be related to “whales buying the dip.”
Monitoring on-chain data by Lookonchain indicates that around 11 p.m. last night, a whale bought 10,309 ETH (approximately $35.82 million) during the market decline. Previously, before the Bitcoin rally on April 8th, the same whale bought 10,643 ETH (approximately $36.75 million), displaying a knack for buying low.
Additionally, X account Material Indicators pointed out this morning that whales holding between $100,000 and $1 million continued to actively buy Bitcoin during price declines. They may be optimistic about the upcoming halving next week and are choosing to position themselves early.
According to data from Coinglass, the cryptocurrency market experienced $250 million in liquidations in the past 24 hours, with 90,298 investors being liquidated. Long liquidations amounted to $152 million, while short liquidations reached $101 million. The total liquidation amount for Bitcoin and Ethereum was approximately $76.48 million and $47.83 million, respectively.
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