Crypto bull run on pause as traders digest latest inflation data

Bitcoin and most altcoins remained in a tight range on Tuesday after the US published the April consumer inflation data. Bitcoin (BTC) was trading at $103,800, while Ethereum (ETH) hovered above the key point at $2,520. The market cap of all cryptocurrencies was largely unchanged at $3.3 trillion. Bureau of Labor Statistics data showed that annual inflation dropped slightly in April, while the monthly figure rose less than expected. The headline consumer price index data rose from minus 0.1% in March to 0.2% in April, bringing the annualized figure to 2.3%. These figures were lower than the median estimates of 0.3% and 2.4%, respectively. The closely watched core consumer price index, excluding volatile food and energy products, rose from 0.1% to 0.2%. It remained at 2.8%, higher than the Federal Reserve’s target of 2.0%. Further to the earlier post, US CPI monthly inflation for April came in below the consensus forecasts for both the headline and core measures (please see Bloomberg table below). While good news, the numbers will have little impact on the ongoing debate on the possible... pic.twitter.com/Nr8y8FRK7p — Mohamed A. El-Erian (@elerianm) May 13, 2025 These numbers will fuel Donald Trump’s call for the Federal Reserve to start cutting interest rates, a move that will boost risky assets like Bitcoin and other altcoins. The data came a week after the Fed left interest rates unchanged, and warned that inflation will keep rising because of tariffs. Jerome Powell, the Fed Chair, hinted that the bank will wait and see to assess the impact of tariffs. Wall Street analysts have reduced their interest rate cut odds. In an X post on Monday, Jim Bianco, a popular economist, noted that the odds of a June cut fell to 8%. July odds have fallen to 35%, and September odds moved from 100% earlier this month to 66%. Rate cuts continue to disappear. * June 18 (red) now 8% (92% no move) * July 30 (green) now 35% (65% no move) No cut is priced until September 17. And even that cut (blue) is disappearing. It was more than 100% ~10 days ago and is now 66% (34% no move) and continuing to fall. pic.twitter.com/5oB9NNEqGe — Jim Bianco (@biancoresearch) May 12, 2025 However, if the inflation figures keep falling and the US removes most tariffs, a rate cut may come as early as July. Polymarket odds of a rate cut in July rose to 27% on Tuesday from Monday’s 20%. Bitcoin and altcoins do well when the Fed is either cutting rates or when it is hinting at a future cut. A good example of this is what happened during the pandemic when the Fed slashed rates to nearly zero. Crypto assets also jumped in 2023 when the FEd hinted at cuts as post-pandemic inflation data started to cool. Source: https://crypto.news/crypto-bull-run-on-pause-as-traders-digest-latest-inflation-data/