Bitcoin dropped by 2.6% today, reaching $95,911.5, as investors anticipate the Consumer Price Index (CPI) report, which will determine the direction of inflation in the United States. If the data comes in higher than expected, it could lead to tighter monetary policy and continued pressure on digital assets. Current forecasts suggest a 2.9% year-over-year increase, adding to the caution among traders.
Federal Reserve Chair Jerome Powell, in his latest testimony, emphasized the strength of the US economy, noting that inflation remains above the target level, reducing the likelihood of an interest rate cut in the near term. This stance strengthens the US dollar and limits risk appetite in financial markets, negatively impacting cryptocurrencies like Bitcoin, as higher interest rates decrease demand for non-yielding assets.
On the corporate front, World Liberty Financial (WLF), a company with financial ties to Donald Trump, announced the launch of a strategic reserve to support major cryptocurrencies such as Bitcoin and Ethereum. The objective of this initiative is to manage market volatility and boost investor confidence, especially amid concerns over US trade policies and their impact on liquidity flows in financial markets.
Meanwhile, Litecoin experienced a sharp decline, dropping to $116.890, marking a 10.13% daily loss. This downturn is the steepest since December 18, 2024, reflecting strong selling pressure following recent gains.
Altcoins also saw significant declines, with Ethereum falling 4.6% to $2,604.58, while XRP dropped 4%. Meme-based cryptocurrencies, such as Dogecoin and $TRUMP, recorded losses of 6.3% and 8.5%, respectively. Investors remain cautious as they await inflation data, which will determine the next movement in the cryptocurrency market, whether the downward trend continues or a potential recovery emerges if the numbers come in lower than expected.
