Disappointing US economic data and Dallas Fed President Lori Logan’s “hawkish” comments appear to be behind the decline. Consumer Confidence Index for May, conducted by the University of Michigan, decreased to 67.4 compared to 77.2 previously. This result was well below economists’ expectation of 76.0.

Even more worrying is that one-year inflation expectations have increased from 3.2% to 3.5%. This contrasts with Federal Reserve Chairman Jerome Powell’s dismissal of “stagnant inflation” concerns just a week ago. Powell stated that he saw no signs of recession or inflation.

Dallas Fed President Logan, in his statement today, emphasized that there are question marks about whether the current Fed policy is “tight” enough and that there are risks of a significant rise in inflation.

This news led to a slight increase in the US dollar and bond interest rates. The stock market was not affected much by these developments. However, the cryptocurrency market, especially Bitcoin, was negatively affected by this. Bitcoin price fell over 4% from the day’s high at one point, falling to $60,700. At the time of writing, the price part has rebounded and reached $61,000, but has lost 0.6% in the last 24 hours. The CoinDesk 20 Index, a broader crypto market indicator, rose 0.15% in the same period.

These developments lead to near-term uncertainty in the cryptocurrency market. As optimism that Bitcoin could surpass the $64,000 resistance level in the coming days is waning, investors are focusing on potential interest rate cuts by the Fed and the inflation outlook.

The rise in US Dollar and bond yields has negatively affected the price of Bitcoin as cryptocurrencies generally have an inverse correlation. Inverse correlation means that the prices of two assets generally move in opposite directions. In this case, as dollar and bond interest rates rise, investors turn to safer havens and move away from crypto money.

Contrary to Fed Chairman Powell’s previous reassuring statements, Dallas Fed President Logan’s hawkish tone statements strengthened speculation that the Fed may increase interest rates in the near future. This situation reduces the risk appetite in the cryptocurrency market and affects prices downwards.

The course of the cryptocurrency market is expected to be uncertain in the short term. If Bitcoin exceeds critical resistance levels in the coming days, it may instill confidence in the market again. However, investors will continue to closely monitor factors such as the course of the US economy, the Fed’s interest rate policy and the inflation outlook. These factors will play a key role in determining the direction of the cryptocurrency market in the coming period.