Bitcoin briefly gained on Wednesday after U.S. inflation data came in cooler than expected, but the move was short-lived as prices returned to pre-release levels and broader markets turned lower.
The cryptocurrency dipped below $80,100 by 15:30 UTC, down from intraday highs above $81,800, according to Binance chart data.
The reversal followed the release of March Consumer Price Index (CPI) figures, which showed a continued slowdown in inflation.
According to the U.S. Bureau of Labor Statistics, the headline CPI rose 2.4% year-over-year, easing from February’s 2.8% and falling below the 2.6% expected by economists. On a monthly basis, prices declined 0.1%, marking the first drop since May 2020 and surprising analysts who anticipated a modest increase.
Core CPI, which excludes food and energy, also undershot expectations. It rose just 0.1% month-over-month, down from 0.2% in February and well below the 0.3% forecast. The annual core inflation rate slowed to 2.8%, its lowest level in nearly four years.
Despite the broadly dovish inflation data, the crypto market reaction remained muted. Bitcoin (BTC) and major altcoins briefly rallied on the news but lost momentum within the hour. The move suggests that traders may have already priced in easing inflation or are shifting focus to broader macroeconomic developments.
Market Shifts Toward Tariff Tensions
While inflation data was a key economic release ahead of the Federal Reserve’s May meeting, analysts suggest the focus has now shifted to global trade policy, particularly U.S. tariff developments. In recent days, President Trump’s administration has adjusted its trade stance, introducing a 90-day pause on certain tariffs while simultaneously raising levies on Chinese imports to 125%.
The mixed approach has introduced further uncertainty. European Commission President Ursula von der Leyen echoed the U.S. move by matching the tariff pause, though she warned the EU would consider retaliatory measures if talks broke down. Later in the day, the White House raised the Chinese tariff rate further to 145%, which coincided with a sharper selloff in U.S. equities.
The Nasdaq 100 dropped 4.3%, extending earlier losses as traders processed the shifting trade landscape. The S&P 500, Dow futures, and Nasdaq futures were all in the red by mid-afternoon, despite the favorable inflation data.
Crypto Eyes Trade, Not Just Rates
Analysts, including Nansen’s Aurélie Barthere, had previously warned that March’s CPI figures were unlikely to produce major moves in crypto unless inflation deviated significantly. “All eyes are on tariff negotiations,” she noted, pointing to ongoing talks with Japan, the EU, and China as critical for near-term macro direction.
The data released Thursday does not yet reflect the recent changes in U.S. trade policy. Further clarity is expected with Friday’s Producer Price Index (PPI) release, which may offer a more complete view of inflation trends in a shifting global trade environment.
