On Wednesday, November 10, at the end of the day, bitcoin fell by 3.08% to $64882. The daily price range was $6,177 or 8.95% from the top. It was by this amount that the bitcoin exchange rate fell after updating the maximum by $ 69,000. The surge in market volatility occurred after the release of statistical data in the US, which showed a significant acceleration of inflation in the US in October: it grew by 6.2% – a record value since November 1990.
The data triggered a rally in the dollar, gold and bitcoin, as investors consider them protective assets against inflation. Gold rose by 2.29% to $1,868, bitcoin – by 3.92% to $69 thousand. The dollar rose as investors began to expect the Fed to raise rates earlier than expected. The spread between US and German government bonds has increased.
However, bitcoin could not keep the height and dived to the level of $62822.
The drop was 8.95%. Why? Here, several factors coincided that had an impact on risky assets.
- Before the release of the inflation report, it was reported that the Chinese real estate giant Evergrande may default on the payment of bonds in the amount of $148 million.
- Then a message appeared that the Deutsche Markt Screening Agentur (DMSA) agency published an announcement about the preparation of bankruptcy proceedings against Evergrande. DMSA invested in Evergrande bonds, the grace period of which expired today (November 10, 2021). No payment was received, they wrote that Evergrande officially defaulted.
- The dollar strengthened sharply after the inflation data, while the major currencies collapsed. US stock indexes also fell, as Evergrande’s problems may spread to other countries. Cryptocurrency belongs to risky assets, so buyers began to take profits on longs after negative news.
- A decline has begun, a new portion of negative information has appeared that the price of bitcoin may be under threat due to the collapse of the stock market and due to fears that almost half of Tether’s reserves consist of commercial securities worth almost $ 30 billion.
Today is a day off in the USA. The debt market is closed. The dollar index has updated a new high. At the same time, the bitcoin exchange rate recovered to $65,600, ether – to $ 4,743. Buyers are following gold, despite the strengthening of the dollar.
The first signs of a corrective movement appeared on the foreign exchange market. If the correction for the main pairs increases, then nothing will prevent bitcoin from returning to the $67,000 level, because it really is a protective asset against inflation. If the day closes above $67 thousand, then we are waiting for the maximum update. The bullish trend remains strong.