Bitcoin Slips as Hotter-Than-Expected June CPI Dampens Rate Cut Hopes
Bitcoin’s price has been rocked by the latest U.S. inflation data, which showed the Consumer Price Index (CPI) rising more than expected in June. The hotter-than-anticipated figures have reduced the likelihood of a near-term Federal Reserve rate cut, triggering sharp volatility in the crypto markets.
June CPI Sparks Bitcoin Selloff
The U.S. Bureau of Labor Statistics reported a 2.7% year-over-year increase in CPI for June—above the forecasted 2.6%. While the monthly CPI held steady at 0.3%, in line with expectations, the annual figure marked the highest inflation level since February 2025 and a significant jump from May’s 2.4%.
Following the data release, Bitcoin briefly surged back above the $117,000 level before falling as low as $116,000. The drop came after BTC had hit a new all-time high of $123,000 just a day prior, translating into a 4% daily decline. This sharp swing underscores how sensitive crypto markets remain to macroeconomic signals.
Markets Rattled by Fed Uncertainty
The CPI data has complicated the outlook for interest rates. According to CME FedWatch, the probability of a July rate cut has plummeted to just 2.6%, with 97.4% odds now favoring the Fed holding steady at 5.25–5.50%. The elevated inflation print, coupled with robust U.S. job numbers and renewed inflationary fears from President Trump’s tariff threats, has led analysts to expect a more cautious stance from the Federal Reserve at the July 30 FOMC meeting.
Analysts like Kyledoops noted that while the CPI beat wasn’t huge, it was enough to spook markets and keep Fed policy uncertain. The Kobeissi Letter had earlier warned of a market selloff if inflation numbers exceeded expectations—fears that have now been validated.
Bitcoin Looks to Regain Momentum
Despite the setback, some market observers believe Bitcoin could still mount a comeback. Prior to the data release, crypto strategist Ali Martinez had predicted that Bitcoin’s recent pullback might set the stage for a rebound, regardless of the CPI outcome. With BTC already showing signs of resilience, traders are watching closely to see if the flagship crypto can reclaim its all-time highs in the days ahead.
As the crypto market digests the implications of the latest economic data, all eyes now turn to the Federal Reserve’s next move.
