Bitcoin sinks after the FBI recovered the Colonial Pipeline loot
Cryptocurrency prices retreated today after the Federal Bureau of Investigation (FBI) managed to track and retrieve some of the Bitcoins that were involved in the Colonial Pipeline hack. Bitcoin, the biggest cryptocurrency in the world, declined by almost 10% in the past 24 hours as analysts and investors worried about the anonymity of transactions. Because of the strong correlation among cryptocurrencies, others like Cardano, Ethereum, and Ripple also fell by double digits. All cryptocurrencies tracked by CoinMarketCap saw their total market cap fall by more than 10%.
Global stocks were little changed today as focus remains on the upcoming US inflation data and European Central Bank (ECB) decision. In Europe, the DAX index was barely moved while the FTSE 100 and CAC 40 indices rose by more than 0.20%. In the United States, the Nasdaq 100 index rose by 0.40% while the S&P 500 index rose by 0.12%. The ECB is expected to deliver its interest rate decision on Thursday. Analysts see it leaving interest rates and quantitative easing unchanged, but any hawkish tone will likely affect European equities. The US will also publish the latest inflation data. If inflation keeps soaring, it could also push the Fed to move earlier than expected.
The DAX index also wavered after the relatively weak German industrial production data. According to the country’s statistics agency, production declined by 1.0% in April after rising by 2.2% in the previous month. This was worse than the expected increase to 0.5%. Further data showed that the country’s economic sentiment dropped from 84.4 to 79.8. Meanwhile, in the US, futures wavered after data showed that the US exports rose from $200 billion in March to $204 billion in April while imports fell from $274 billion to 273 billion. As a result, the trade deficit narrowed from more than $74.4 billion to $68.9 billion.
The EURUSD pair declined slightly after the weak German industrial production data. On the four-hour chart, the pair managed to move below the upper side of the falling channel. It has also moved to the 25-day exponential moving average while the Relative Strength Index (RSI) has moved to 50. Therefore, the pair may keep falling as bears target the lower side of the channel at 1.2100.
The BTCUSD pair declined to a low of 32,855 after the FBI managed to retrieve some of the ransom paid during the Colonial Pipeline hack. The coin managed to move below the bearish pennant pattern. It has also dropped below the 25-day and 15-day moving averages and the 23.6% Fibonacci retracement levels. The Relative Strength Index (RSI) has also moved below the oversold level. Therefore, the pair may keep falling, with the next target being at 30,000.
The ETHUSD pair declined to a low of 2,500 as the rest of the cryptocurrency industry sold off. On the four-hour chart, the pair moved below the lower side of the bearish pennant pattern that is shown in pink. In price action, this is usually a bearish signal. Similarly, it has moved below the short and medium-term moving averages while the RSI has crossed the ascending trendline. Like the BTCUSD pair, ETHUSD will likely keep falling in the near term.