Key Points:

• Bitcoin was trading at $82,800 at the time of reporting, slightly down from the previous 24 hours.
• Ethereum had a notable drop of 3.5%, trading at $1,880, with its ETH/BTC ratio falling 67% since November 2021.
• Market watchers anticipate the Federal Reserve will consider rate cuts this year, though uncertainty about the timing persists.

Observations

The cryptocurrency market had a generally flat day following a brief rally triggered by favorable U.S. inflation data, which quickly waned. Bitcoin (BTC) is priced at $82,800, recording a 0.5% decrease in the last 24 hours. The CoinDesk 20 index, which tracks the top 20 cryptocurrencies (excluding stablecoins and meme coins), decreased by 0.8% in the same timeframe.

Further dragging the index down, Ethereum (ETH) is the biggest loser at 3.5% down to about $1,880. At 0.022, the current ETH/BTC ratio mirrors levels seen in April 2020 just before DeFi projects like Uniswap and MakerDAO gained prominence, marking a staggering 67% plunge since its peak in November 2021.

“Today’s lower-than-expected CPI should be bullish, signaling faster rate cuts, but crypto hasn’t reacted strongly,” Dr. Youwei Yang, Chief Economist at BIT Mining, noted. “Weeks of market fear require more than a single good print to regain confidence.”

Yang further elaborated on economic challenges, mentioning the risks posed by aggressive tariffs on inflation and the disruption caused by job losses from federal efficiency measures. “This creates a dilemma for the Fed: High inflation complicates rate cuts, while market declines and unemployment pressures prompt quicker action. Premature cuts could reignite inflation, complicating future adjustments.”

Expectations suggest the Fed might initiate rate cuts possibly in May or June, with some forecasting up to 100 basis points by October.

U.S. stocks saw a slight rebound post a significant drop in recent weeks. The Nasdaq climbed 1.2%, while the S&P 500 gained 0.5%.