Bitcoin, Dogecoin, Shiba Inu Falling Drastically: Here’s Why

Cryptocurrency Market Retreats After Inflation Data

The cryptocurrency market has reversed gains made on Wednesday following the release of US inflation data. Bitcoin, after reaching $70,000, has fallen below $67,000. Many analysts believe a drop below $66,000 could trigger further declines to $64,000.

Altcoins have also suffered, led by Ethereum, Solana, and XRP. Ethereum has lost 4.4% to $3,450, Solana 7% to $147, and XRP 3% to $0.48, according to CoinGecko.

Meme coins have not been spared, with Dogecoin and Shiba Inu leading the decline. Dogecoin has dropped below support at $0.14, while Shiba Inu risks falling below $0.00002.

Factors Contributing to Bitcoin's Decline

US inflation data, particularly the Consumer Price Index (CPI), was released on June 12 and came in slightly lower than expected. Initially, Bitcoin and altcoins reacted positively after a sharp drop to $66,000 on Tuesday.

However, the hawkish stance of the Federal Reserve following its FOMC meeting on Tuesday and Wednesday dampened bullish sentiment. Fed Chair Jerome Powell indicated that the central bank is not considering interest rate cuts at this time.

The FOMC members indicated a modest move towards an inflation target of 2% but emphasized that rate cuts are not yet imminent. US inflation has eased from its peak in 2022 and 2023, and Powell expressed confidence in the restrictive policy, stating that its effectiveness will become apparent in time.

PPI Data Fails to Ignite Market Momentum

The Producer Price Index (PPI) data in the US showed that inflation is easing, beating economists' expectations. This is typically a positive sign for risky assets like crypto and stocks. However, Bitcoin and crypto prices failed to regain momentum, giving control back to sellers.

Analysts from QCP Capital believe that investors are confused about the future market outlook, particularly with the Fed maintaining a hawkish stance on interest rates.