Bitcoin Barely Moves as U.S. Inflation Hits 2021 Low in April, with the CPI dropping to 2.3%, below the expected 2.4%. Despite bitcoin’s recent rise above $100K, market reactions remain muted. This article explores U.S. inflation impact on bitcoin, Federal Reserve rate expectations, and bitcoin market sentiment trends.
U.S. Inflation Data and Bitcoin’s Reaction
Bitcoin Barely Moves as U.S. Inflation Hits 2021 Low, showing minimal price change. On May 13, 2025, after the U.S. Labor Department reported a 2.3% CPI—down from a forecast of 2.4%—bitcoin edged up from $103.5K to $103.8K on Binance. The core CPI stayed at 2.8%, aligning with expectations. Historically, such data influences Federal Reserve rate expectations, often boosting demand for risk assets like crypto, but the market response was tepid this time.
Federal Reserve Rate Expectations Unchanged
CoinDesk notes that the inflation slowdown won’t likely prompt the Federal Reserve to cut rates soon. Fed Chair Jerome Powell has emphasized a cautious stance on rate changes throughout spring 2025. Market odds for a June rate cut of 25 basis points are just 8.2%, per CME FedWatch, down from 80% a month ago. July’s odds of no rate hike are 61.4%, up from 7%. This aligns with prior RBC Crypto analyst views that the Fed’s reluctance to lower rates could cap crypto price growth, highlighting the U.S. inflation impact on bitcoin.
Bitcoin Market Sentiment: New Buyers vs. Veterans
Bitcoin’s price hit a three-month high of $106K in early May, pushing its market cap above $2 trillion. This surge drew new buyers, driven by FOMO, as Glassnode reports. However, bitcoin market sentiment trends show experienced traders exercising caution. Glassnode warns that the influx of emotional new investors, paired with slowing capital inflows, raises the risk of price consolidation or a drop.
Bitcoin Barely Moves as U.S. Inflation Hits 2021 Low, reflecting a market at a crossroads. While new investors fuel short-term gains, Federal Reserve rate expectations and cautious veterans suggest potential volatility ahead.
