The market plummeted and the bulls left again?

From May 12th to 13th, BTC fell from $57,900 to a minimum of $45,750, with a maximum drop of more than 20%. Encrypted assets such as ETH and LTC also went down simultaneously, with heavy losses.

Under the current round of sharp decline, the bulls in the futures contract market suffered heavy losses. According to the data of the futures contract at 2 pm on May 13, the liquidation funds in the encrypted asset market totaled 2.56 billion US dollars within 24 hours, setting the highest liquidation in the past 20 days Amount, of which the proportion of long liquidation exceeds 80%.

Some analysts believe that Tesla's founder Elon Musk's tweet on the morning of the 13th about Tesla's suspension of accepting BTC payments was the trigger for the accelerated decline in the market. Elon Musk changed his face and said that cryptocurrency is a good idea, but mining has caused damage to the environment.

In addition, the rise in the US CPI (Consumer Price Index) has brought negative news to the US stock market and the encrypted asset market. On the 12th, the U.S. Department of Labor released data showing that the CPI in the U.S. rose by 4.2% year-on-year in April, significantly exceeding the previous market expectation of 3.6%, and the growth rate was higher than that during the 2008 financial crisis.

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The market plummeted by 20%, Musk's "change of face" may be an inducement

From May 12th to 13th, the encrypted asset market once again experienced a dark moment. BTC continued to decline at noon on the 12th, falling from US$57,900 to a minimum of US$45,750, and the price of a single currency shrank by US$12,150, with a maximum drop of 20.98%.

BTC led the decline, and other mainstream assets also plummeted. ETH fell from $4,332 to a minimum of $3,500, with a maximum drop of 19.2%, while LTC dropped from $393 to $301, a short-term drop of 23.4%.

As of 2:00 pm on May 13, the entire market rebounded, and BTC rose back to around $51,000, but it was still down 12% from the previous day's high.

The sudden plunge has tightened the nerves of market investors. Under the fierce long-short competition, many people sold in panic, and the debate on whether the bull market is over has resumed. The comment areas of big V bloggers in various circles are full of questions such as "Is the bull market still there?" Under the sharp drop, some people choose to clear their positions or reduce their positions to avoid risks, while others are busy buying bottoms, expecting the market to reach new highs again.

Compared with spot holders, investors who have been long in the futures contract market in the past two days are undoubtedly the most injured. According to the data of Contract Emperor at 2 pm on May 13, the liquidation funds in the encrypted asset market totaled 2.56 billion US dollars within 24 hours, setting the highest liquidation amount in the past 20 days. The positions of a total of 224,688 investors on the entire network were forced out, and the proportion of long liquidation exceeded 80%.

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Elon Musk Announces Tesla Suspension of Accepting BTC Payments

On the morning of May 13, Musk announced through his personal Twitter that Tesla has suspended accepting BTC payments. He said that BTC mining has brought about a sharp consumption of energy such as oil and coal. Although cryptocurrency is a good idea from many aspects, it cannot be at the cost of damaging the environment. He also revealed that Tesla will not sell bitcoin for the time being and will seek cryptocurrencies with lower energy consumption.

From the perspective of market trends, BTC did accelerate its decline after the release of this tweet. The strong IP of Musk and Tesla has shown influence on the encrypted asset market, and investors have once again seen the impact of institutional trends on the Bitcoin market. about.

Some analysts believe that when Tesla holds BTC, announcing the suspension of BTC payments is equivalent to a "suicide attack." There are many investors who have lost money due to market declines, pointing their fingers at Musk, thinking that he is a "shit stirrer" in the encrypted asset market.

Makoto Sakuma, a researcher at the Nisei Institute of Basic Research, believes that Musk's enthusiasm for cryptocurrencies may be waning.

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U.S. inflation beats expectations, financial markets wait for monetary policy

During the sharp drop, the release of the U.S. CPI (Consumer Price Index) in April may also have an impact on the trend of the encrypted asset market.

On the evening of May 12, the U.S. Department of Labor released data showing that as the U.S. economic recovery was on track and energy prices soared, the CPI in the U.S. rose by 4.2% year-on-year in April, which greatly exceeded the previous market expectation of 3.6%, and the growth rate hit September 2008. Monthly high. In addition, after excluding food and energy prices, the core CPI in the United States increased by 0.9% month-on-month in April, the largest increase since 1981 and surpassing the financial crisis in 2008. After the news was announced, the 10-year U.S. bond yield rose to nearly 1.7%.

Generally speaking, an accelerated CPI growth rate means that the level of inflation is also increasing. Affected by this, the three major U.S. stock indexes opened lower and moved lower. The Dow once fell by more than 710 points during the session, and technology stocks were sold off first.

As of the close of U.S. stocks in the early morning of May 13, the three major stock indexes fell sharply. The Dow fell about 2%, the largest one-day drop since January this year; the S&P 500 fell 2.14%, the largest one-day drop since February this year. The Nasdaq fell 2.67%, with Tesla's share price falling 4%.

Huang Han, a partner of Wan Gong Capital, believes that the CPI in the United States in April exceeded expectations by a large margin, and inflationary pressures are surging. The US money market believes that the probability of raising interest rates within this year has risen to 88%, and global monetary tightening is coming.

Previously, the demand for safe-haven funds brought about by the Fed's accelerated printing of money was regarded by industry insiders as a key factor in the rise of the encrypted asset market. Today, the level of inflation in the United States has increased, to a certain extent, it has aroused concerns about the early tightening of its monetary policy.

In this regard, the Fed's attitude is temporarily unclear. On the evening of May 12, Federal Reserve Vice Chairman Clarida said that the economy is still far from the Fed's goal and it will take some time to make substantial further progress. But he was surprised by the higher-than-expected inflation data and said the Fed would act if price pressures were not temporary.

According to Mark Zandi, chief economist of Moody's Analytics, the rise in inflation largely reflects the reopening of the U.S. economy, "As the Fed has said before, the rise in inflation is temporary and the Fed will not change its current monetary policy.”

In any case, the sharp increase in CPI in the United States is not good news for the encrypted asset market. Although the current market seems to be temporarily stable, analysts believe that the Fed's decision-making has become the sword of Damocles hanging above the encrypted asset market. Once monetary policy is tightened, the speed of the bull market turning bearish will also accelerate.