Bitcoin Briefly Dips Below $63,000 After Disappointing U.S. Inflation Report

Bitcoin (BTC) experienced a brief dip below $63,000 on Thursday amidst a broader decline in the cryptocurrency market. This drop followed the release of new data indicating increased inflation and slower economic growth in the U.S. during the first quarter.

The preliminary report on first quarter GDP from the U.S. government revealed a growth rate of just 1.6%, significantly below the 2.5% forecasted by analysts and down from 3.4% in the previous quarter of 2023. Additionally, the GDP price index showed a slightly higher-than-expected increase of 3.1%, up from 1.6% in the preceding quarter. This unexpected rise in inflation raised concerns among investors, leading to a decrease in optimism for potential interest rate cuts in the near future. Consequently, this sentiment adversely impacted risk assets across various markets.

Major U.S. stock indexes, including the S&P 500 and the Nasdaq, started the trading session down nearly 2%, while the yield on the 10-year U.S. Treasury bond surged by 8 basis points to reach 4.73%, marking its highest level since November.

During this period of market turbulence, BTC experienced a decline of over 4%, reaching a low of $62,800 before recovering to $63,700. Similarly, Ether (ETH) also saw a 4% decrease, trading at around $3,100.

The downturn wasn't limited to Bitcoin and Ethereum; altcoin majors suffered even greater losses. Tokens native to layer-1 networks, such as Solana (SOL), Avalanche (AVAX), and Aptos (APT), all experienced declines ranging from 8% to 9% before partially rebounding from their lows.