Bitcoin & Crypto Markets Brace for Impact as US Inflation Spikes Again—What’s Next?

Crypto bulls just got a reality check. For the second time this year, US inflation data has come in hot—and Bitcoin’s price action is feeling the heat. Traders are scrambling as traditional markets wobble, dragging crypto down with them. Here’s the breakdown.

Why Inflation Hits Crypto Harder

When the Fed’s favorite economic indicator flares up, risk assets bleed first. Bitcoin’s 5% drop in 24 hours? Just the start. Altcoins are faring worse—Ethereum’s down 7%, while meme coins got obliterated. The pattern’s clear: macro trumps hype every time.

The Silver Lining (Yes, There Is One)

Volatility breeds opportunity. Institutional wallets are quietly accumulating at these levels, and derivatives data shows leveraged shorts getting liquidated. History says crypto bounces harder after macro shocks—assuming the Fed doesn’t drop another hammer next week.

Wall Street’s playing 4D chess with your portfolio again. Meanwhile, crypto’s either the future of finance or the world’s most expensive stress test—depending on which hedge fund manager you ask today.

Bitcoin And Crypto Tumble As Inflation Fires Up

Still, some crypto-focused traders described the release as broadly balanced. “CPI coming in mostly according to estimates… Core a bit lower, CPI a bit higher. Not much going on here. As always, the more important thing is how the market reacts and digests the data today,” said Daan crypto Trades.

Andreas Steno Larsen, founder of Steno Research, argued that the mix of rising goods prices and moderating services inflation may be constructive for risk assets: “June CPI confirms our view: goods are quietly starting to reinflate, but disinflation in services and housing still dominates the overall picture… Ideal setup for a portfolio long tech/crypto, commodities, and reflation FX.”

Others were less sanguine. “What do you know. Inflation still stuck. The Fed pause continues and the larps screaming for rate cuts everyday continue to look stupid… HIGHER FOR LONGER,” posted the chart-technician Charting Guy.

Treasury markets reacted with a modest rally: the 10-year yield surged to 4.475 percent after the report, while the US dollar index shot above the 98.5 level. Interest-rate futures continue to price roughly 52 percent odds of the first Fed cut coming at the September meeting, according to CME FedWatch data.

At press time, Bitcoin traded at $116,175.