#IsraelStrikesIranBTCPlunges

US Inflation Heats Up, Wintermute Says BTC Could Drop to $70,000

Wintermute has just released its latest weekly market update report on Tuesday (5/19). In its research, Wintermute highlights the collapse of the digital asset sector where Bitcoin's price movement dropped 5.7 percent to around $78,000 and Ethereum fell up to 10.2 percent in a week. This sharp correction was mainly triggered by massive profit-taking actions from institutional investors who took advantage of the previous upward momentum to exit risky assets. This move resulted in fund outflows from spot Bitcoin ETFs surpassing $1 billion, breaking the inflow trend that had lasted for six consecutive weeks.
​Wintermute states that the plunge in BTC prices is a direct impact of the macroeconomic conditions in the United States (US) heating up again. Recent data shows the US Consumer Price Index (CPI) for April surged to 3.8 percent year-over-year (YoY), exceeding market expectations. This inflation spike immediately triggered a rise in 10-year bond yields to 4.58 percent, while also prompting market participants to anticipate a 44 percent chance that the US Federal Reserve (Fed) will raise interest rates again in December.
​Technically, the report confirms that BTC's movement repeatedly failed to break through the 200-day moving average indicator at the $82,200 level due to fragile spot liquidity. The decline in asset reserves across various exchange platforms to the lowest levels is also seen as unable to withstand this short-term correction because of the rapid shift of capital into global commodities. Currently, the price range of $76,000 to $78,000 is a crucial support area that will determine whether BTC can hold or is potentially set to drop further into the $70,000 zone.