Crypto Rally Fades Despite Mild Inflation Report

Bitcoin briefly surged past $84,000 following the U.S. CPI report but later settled near its previous level.

Key Points:

• Bitcoin was trading at $82,800, slightly down from the previous day.
• Ether underperformed, falling 3.5% to $1,880, with the ETH/BTC ratio down 67% from its November 2021 peak.
• Traders anticipate Fed rate cuts this year, though the timing and scale remain uncertain.

The crypto market remained mostly flat as an initial rally sparked by favorable U.S. inflation data quickly faded.

Bitcoin (BTC) is trading at $82,800, down 0.5% over the past 24 hours. Meanwhile, an index tracking the top 20 cryptocurrencies (excluding exchange coins, stablecoins, and memecoins) declined by 0.8% during the same period.

Dragging the broader index lower, ether (ETH) was the worst performer, falling 3.5% to around $1,880. The ETH/BTC ratio now stands at 0.022, its lowest level since April 2020—just before DeFi summer boosted projects like Uniswap and MakerDAO. Since its peak in November 2021, the ETH/BTC ratio has dropped an astonishing 67%.

Dr. Youwei Yang, Chief Economist at BIT Mining, noted that while the lower-than-expected CPI report should be a bullish signal for faster rate cuts, crypto markets have shown little reaction. "Weeks of market fear require more than a single good print to regain confidence," he explained.

Yang also pointed to aggressive tariffs as a key concern, warning that they could make inflation more persistent while destabilizing markets. Additionally, he highlighted layoffs initiated by the Department of Government Efficiency (DOGE), emphasizing the dilemma for the Federal Reserve: persistent inflation from tariffs complicates rate cuts, while market downturns and job losses increase pressure to ease policy. Acting too soon, however, could reignite inflation and create future challenges.

Markets currently anticipate the Federal Reserve could begin rate cuts as early as May or June, with potential reductions totaling up to 100 basis points by October.

Meanwhile, U.S. stocks saw a modest recovery on Wednesday after weeks of losses, with the Nasdaq rising 1.2% and the S&P 500 gaining 0.5%.