Soft Inflation Data Fails to Sustain Crypto Market Gains

Bitcoin Jumps Above $84K on CPI Report, But Fails to Hold Gains

Bitcoin briefly surged past $84,000 after the release of U.S. inflation data, but the rally quickly faded, leaving the broader crypto market little changed by the end of the day.

As of now, Bitcoin (BTC) is trading at $82,800, down 0.5% in the past 24 hours. The CoinDesk 20 Index, which tracks the top 20 cryptocurrencies excluding exchange tokens, stablecoins, and meme coins, has dropped 0.8% over the same period.

Ether (ETH) led the declines, sinking 3.5% to $1,880, making it the worst-performing asset in the index. The ETH/BTC ratio has dropped to 0.022, its lowest level since April 2020, before the DeFi boom that brought Uniswap and MakerDAO into the spotlight. The ratio has now plunged 67% from its peak in November 2021.

“While the lower-than-expected CPI report suggests that rate cuts could come sooner, crypto markets remain cautious,” said Dr. Youwei Yang, Chief Economist at BIT Mining, in a note to CoinDesk. “Investors need more sustained positive signals before regaining confidence.”

Yang also highlighted Trump’s trade policies as a challenge for the market, stating, “Aggressive tariffs could keep inflation elevated, complicating the Fed’s rate-cut timeline and creating uncertainty in risk markets.”

Market expectations currently point to Federal Reserve rate cuts beginning in May or June, with as much as 100 basis points of easing expected by October.

Meanwhile, U.S. stocks saw modest gains following recent declines. The Nasdaq climbed 1.2%, while the S&P 500 added 0.5% at the close of trading.

About The Author

ctleditor

See author's posts