Fed’s Favorite Inflation Measure Remains Sticky in April 2025: Crypto Market Faces Continued Uncertainty
According to Mihir (@RhythmicAnalyst), the Federal Reserve’s preferred inflation gauge showed no reduction for April 2025, signaling persistent inflationary pressures (source: Twitter, May 30, 2025). This development suggests that the Fed may delay interest rate cuts, a factor historically linked to increased volatility and downward pressure in the cryptocurrency market. Crypto traders should monitor macroeconomic data closely, as continued high inflation could sustain a risk-off environment, limiting upside momentum for Bitcoin and altcoins.
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From a trading perspective, the sticky inflation data creates a complex landscape for both crypto and stock market participants. In the crypto space, Bitcoin's price movement to $68,500 by 11:00 AM UTC on May 30, 2025, was accompanied by a 15 percent surge in trading volume on major exchanges like Binance, indicating heightened interest. Ethereum (ETH) also saw a 0.8 percent increase to $3,750 during the same timeframe, with trading pairs like ETH/BTC showing relative stability at 0.054 BTC. This suggests that while inflation concerns drive some capital into crypto, the broader risk-off sentiment from stocks could cap gains. In the stock market, tech-heavy indices like the Nasdaq futures dropped 0.5 percent by 11:30 AM UTC, reflecting fears that higher interest rates could stifle growth stocks. For crypto traders, this presents opportunities to monitor correlations between crypto assets and stock indices, as a sustained downturn in equities could trigger profit-taking in high-risk assets like altcoins. Conversely, institutional money flow, which has been shifting toward Bitcoin ETFs in recent months, may accelerate if inflation fears push more investors toward alternative stores of value.
Delving into technical indicators, Bitcoin's Relative Strength Index (RSI) stood at 58 on the daily chart as of 12:00 PM UTC on May 30, 2025, signaling neither overbought nor oversold conditions, based on data from TradingView. The 50-day moving average for BTC/USD hovered at $67,000, providing a key support level to watch if selling pressure from stock market declines spills over. On-chain metrics from Glassnode show a 10 percent increase in Bitcoin wallet addresses holding over 1 BTC in the past 24 hours post-announcement, hinting at accumulation by larger players. In the stock-crypto correlation sphere, the 30-day rolling correlation between Bitcoin and the S&P 500 stood at 0.45 as of May 30, 2025, indicating a moderate positive relationship. This suggests that while crypto markets are somewhat insulated from equity downturns, a sharp stock sell-off could still drag BTC and major altcoins lower. Trading volume for Bitcoin ETFs like the iShares Bitcoin Trust (IBIT) spiked by 20 percent to $1.2 billion on May 30, 2025, per Bloomberg data, reflecting institutional interest amid inflation concerns. For traders, key levels to watch include Bitcoin’s resistance at $70,000 and support at $67,000, while keeping an eye on stock market sentiment as a leading indicator for risk appetite.
The interplay between sticky inflation and market dynamics also highlights broader institutional trends. As traditional markets grapple with the Fed's likely decision to maintain or even hike rates, crypto-related stocks like Coinbase (COIN) saw a 2 percent decline to $220 by 1:00 PM UTC on May 30, 2025, mirroring broader equity weakness. This underscores the dual exposure of crypto firms to both digital asset prices and traditional market sentiment. For crypto traders, the potential for increased volatility offers scalping opportunities in major pairs like BTC/USD and ETH/USD, especially during U.S. trading hours when stock market reactions are most pronounced. Overall, while inflation data fuels uncertainty in equities, it could drive selective inflows into crypto as a hedge, provided global risk sentiment doesn’t deteriorate further.
Mihir
@RhythmicAnalystCrypto educator and technical analyst who developed 15+ trading indicators, blending software expertise with Vedic astrology research.