After U.S. inflation data came in above market expectations, risk assets came under pressure, and the crypto market erased its earlier gains. Bitcoin fell below $80,000, with major tokens such as Ethereum, XRP, Solana, and Dogecoin also declining, reigniting concerns over the Fed’s intent to maintain high interest rates.
Inflation data suppresses risk appetite
The report noted that the latest U.S. inflation data came in stronger than expected, prompting traders to reassess the pace of rate cuts. Core PPI rose 5.2% year-over-year, above the market expectation of 4.3%, and monthly data also exceeded forecasts. This reinforced market perceptions of a more hawkish stance by the Federal Reserve, putting pressure on speculative assets.
As of press time, TradingView data shows Bitcoin trading at approximately $79,094. Ethereum has dropped to $2,221, XRP is trading at $1.43, Solana at $89.13, Dogecoin at $0.1133, while Cardano and BNB are also declining.
Spot Bitcoin ETFs experience sustained outflows
On-chain data firm Glassnode stated that the 7-day average net outflow from U.S. spot Bitcoin ETFs has declined to $88 million per day, the largest outflow since mid-February. The firm believes this round of capital outflows differs from February, when withdrawals occurred amid weakening prices; this time, they appear more like exits occurring during a price rebound.
Glassnode believes that some institutional investors have taken advantage of the recent rally to reduce their positions, rather than passively selling in panic. This shift has dampened market sentiment and increased selling pressure on Bitcoin around the $80,000 level.
- 7-day average net outflow for U.S. spot Bitcoin ETFs: $88 million per day
- Bitcoin price: approximately $79,094
- Ethereum price: approximately $2,221
PCE and geopolitical tensions continue to exert pressure
In addition to the PPI, the report noted that the PCE inflation metric, which the Fed monitors more closely, rose to its highest level since August 2023, while core PCE reached its highest level since November 2023. As inflation persistence strengthens, market expectations for interest rates to remain elevated for an extended period have further increased.
Meanwhile, geopolitical tensions involving the United States and Iran are also seen as additional disruptive factors. The combination of hotter-than-expected macroeconomic data, outflows from ETFs, and geopolitical risks has put short-term pressure on the crypto market, erasing part of the earlier gains driven by the U.S. Senate’s progress on the CLARITY Act.