June CPI has come in hot!
Inflation in the U.S. picked up pace in June, sending a ripple through global markets and crypto alike. According to the latest CPI data, consumer prices rose 0.3% month-over-month, up from 0.1% in May, and exactly in line with forecasts.
On a year-over-year basis, inflation hit 2.7%, the highest level since February. While the numbers didn’t exceed expectations, they confirmed what many feared: inflation isn’t cooling as quickly as hoped.
The Core CPI, which excludes food and energy, rose 0.2% MoM and came in at 2.9% YoY, again meeting estimates but keeping pressure on the U.S. Federal Reserve to stay cautious.
Bitcoin Reacts Fast, Drops From Recent Highs
Bitcoin took a hit soon. The world’s largest crypto fell nearly 6%, sliding from a recent peak of $123,300 to around $116,227.
Investors quickly adjusted their expectations around the Fed’s next move. Just last week, the odds of a rate cut in September were over 80%. Now, they’ve dropped to 60%, according to the CME FedWatch Tool.
The sudden shift spooked risk markets. Crypto, being one of the most rate-sensitive assets, responded immediately.
“BTC has undergone short-term liquidation following a series of breakouts,” analysts at Bitunix said. “Key support to watch: $117,000–$116,300. If this zone holds, a rebound may occur. If support breaks, the next key level lies at $110,500.”
Politics Add to the Uncertainty
Beyond the data, there’s growing talk about a possible shake-up at the Fed. President Donald Trump is reportedly unhappy with Fed Chair Jerome Powell, having called him “horrible” as well, and some analysts now see his removal as a real risk.
Deutsche Bank’s George Saravelos warned that such a move could trigger a 3-4% drop in the dollar and a spike in U.S. Treasury yields. That would only add more volatility to an already tense market.
What This Means for Crypto
Inflation matters for crypto and not just because of rate cuts. Higher inflation keeps interest rates higher for longer. That usually means money flows back into safer, yield-bearing assets like bonds, and out of high-risk bets like Bitcoin, Ethereum, and altcoins.
So while June’s numbers haven’t shocked the system yet, it’s a clear reminder that the path ahead won’t be smooth. With less chance of near-term easing and political noise rising, the crypto market could stay on edge in the weeks to come.
