Bitcoin Hits Two-Month Low Amid Dollar Strength, Cooling Ordinals Activity
May 12, 2023

Bitcoin Hits Two-Month Low Amid Dollar Strength, Cooling Ordinals Activity

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Bitcoin dropped to a two-month low of $26,188 early this morning amid rising dollar strength and a cooldown in the Ordinals hype.

The dollar index (DXY), which values the dollar against other global reserve currencies, recorded a strong uptick on Thursday, inching toward monthly highs.

Bitcoin, which usually has an inverse relationship with the dollar, started showing weakness after the dollar’s rise, dropping below $27,000.

Its price lost 4% in the last 24 hours, taking down $50.4 million in future orders liquidation according to Coinglass data. Roughly 85% of those liquidations were for levered-long traders.

The total losses for the entire crypto market stood at 3%, and total liquidations hit $143 million.

After Bitcoin, Ethereum traders were liquidated for roughly $30 million followed by PEPE traders at just over $72 million.

Ethereum also dropped 3.4%, declining below the $1,800 level for the first time since March 28. PEPE, the hyper-popular meme coin, has also plummeted more than 23% overnight.

Dollar soars, Bitcoin ordinals cool

The Organization of the Petroleum Exporting Countries (OPEC) raised concerns yesterday about the U.S. debt ceiling crisis in its monthly report.

The U.S. debt ceiling is a limit set by the government that limits how much the U.S. Treasury can borrow. The Treasury has already breached its limit of $31.4 trillion and may soon default on its payments, including interest payments on government bonds and other social benefits to its citizens as early as June.

The OPEC report read, “In addition, the U.S. debt ceiling issue has so far not been resolved, a matter that could have economic consequences.”

The U.S. government failed to raise the ceiling this week to give the market some room, pushing the decision to next Thursday.

The newfound spike in Bitcoin’s network usage due to Ordinals also showed signs of cooling as the number of transactions in the mempool, which represents the pending Bitcoin transactions, dropped.

Bitcoin mempool transaction count. Source: Glassnode.

The trading volume for Bitcoin Ordinals from data analyst Domo’s dashboard on Dune shows a significant decline of more than 50% on May 11 from the previous day, confirming a slowdown in Ordinals trading.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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