Bitcoin drop driven by US trade deficit, China banks

The key takeaways

• Global investor caution was heightened by the rise in US trade deficits and insider sales of stocks, as well as weak Chinese banks.

• The macroeconomic situation remains weak, and this is what drives the whales to continue selling Bitcoin.

BitcoinBTC() fell below $118,000, its lowest level for 50 days. This sharp drop caught many traders by surprise and led to $137 million of liquidations in leveraged bullish position. This move followed a drop of 1.2% in the Nasdaq 100, a tech-heavy index. Growing doubts over the durability artificial intelligence Growth in the sector

The market participants now weigh whether Bitcoin’s decline reflects macroeconomic pressures broader or if it is only limited to cryptocurrency.

Investors became more cautious after the United States announced a 22 percent increase in its trade deficit. Imports exceeded exports by 103.6 billion dollars, widening this gap even more than forecasted. Reuters noted Trade is a good example. “could be a major drag on economic growth in the third quarter.”

The risk of insider trading and Chinese bank’s rising bad debt is increased.

Malone_Wealth, a X user, pointed out that all 200 of the largest stock transactions by directors, executives and large shareholders were sales last week. This was something unprecedented for him. Insider activities are typically tracked through the filings of the US Securities and Exchange Commission.

The most notable transactions were a $961 million planned sale by Walmart’s Jim C. Walton; $164 million sold by Snowflake’s Frank Slootman and $160 millions from Amer Sports’ Dennis J. Wilson. Travis Boersma, of Dutch Bros and Klaviyo, made a large move at $81.5 millions. Andrew Bialecki from Klaviyo was also a big player at $73.7.

China’s largest five lenders have raised additional concerns reported Financial Times reports record low margins, and an increase in delinquencies. According to figures released by the Banking Credit Asset Registration and Transfer Center, Chinese retail banks have disposed off $5.2 billion worth of bad debt in the first quarter. This is an increase eightfold from one year ago.

Nvidia shares and SMCI stock declines exacerbate AI sector concerns

AI is also a source of increasing unease. Nvidia revealed that it uses 44% of the power in its datacenter. revenue Just two clients contributed to the total. Despite NVDA’s strong third-quarter guidance and its quarterly results, the shares of NVDA fell by 4.7% across two trading sessions.

Super Micro Computer warned Thursday about weaknesses in the financial reporting that could affect its ability to report results. On Friday, the stock of this $25 billion Nvidia Partner, which supplies high-performance AI Servers and Data Center Infrastructure, fell by 5.1%.

Related: Bitcoin trend reversal to $118K or another drop to $105K–Which comes first?

The bond market showed similar signs of risk-aversion. Demand for US The yield on 2-year Treasurys fell to 3.62% from 3.80%, the lowest in 4 months. Investors are willing to accept lower yields despite the persistent inflation. This indicates a preference for safety.

Recent Bitcoin sales Long-dormant Whales and Stable miner outflows The negative mood has been heightened. BTC has been on a downward trend for some time now, but the main cause is still the weak macroeconomic outlook. Many traders are reducing their exposure to BTC ahead of the US National Holiday.

This is only a general article and not legal or investment advice. These are solely the opinions, views, and thoughts of the author and may not reflect the opinions and views of Cointelegraph.