Facing new data showing that inflation is slowing in the United States, the cryptocurrency market traded lower on Friday. Bitcoin fell by 1.4% to $60,600, while Ethereum dropped 1.3% and Solana declined 3.6%, reversing much of its ETF-driven gains, despite 21Shares submitting another application today.
Leading the gains were Akash Network (AKT) with a 7% increase and Ethereum Name Service (ENS) with a 5% increase. Fetch.ai (FET), Athena (ENA), and Quant (QNT) all fell by 5% or more.
According to a report released by the Department of Commerce on Friday, the inflation rate for May dropped to its lowest annual inflation rate since May 2021.
The core PCE price index for May rose by 0.1%, meeting expectations from Dow Jones. On an annual basis, the main PCE price index increased by 2.6%. The PCE index is crucial for traders as it is closely monitored by the Federal Reserve and influences its interest rate decisions.
Michael Brown, Senior Research Strategist at Pepperstone, said, “Today’s data may help provide more confidence to the Federal Open Market Committee that the US economy is still on a bumpy path towards anti-inflation.”
“However, the ‘one swallow does not make a summer’ situation still exists, so the May PCE data is unlikely to alone open the door for (interest rate cuts), though it will indeed nudge the door slightly open.”
Cryptocurrency sentiment was also boosted by asset management company VanEck’s application for a spot Solana ETF on Thursday.
According to Reuters on July 26, the spot Ether exchange-traded fund could potentially enter the market as early as the first week of July.
CEO of MN Trading, Michael Van de Poppe, stated that there had been a “major washout” in the altcoin market. He said, “However, with the upcoming Ether ETF, I expect to see a reversal in many Ethereum ecosystem tokens.”
Based on the cryptocurrency fear and greed index, market sentiment has entered the fear zone during recent volatility.
Data from Farside showed that the inflow of funds into all Bitcoin spot ETFs slowed to $13 million on Thursday.
Data from CoinGlass confirmed that in the past 24 hours, 32,173 traders were liquidated, with a total amount of $76 million.
