Why is Crypto Market Up Today: CPI Data and Steady Fed Rates Triggers
The world's crypto market is displaying a new wave of green today, as the overall market cap has moved up to $3.48 trillion, with a 0.7% increase in the past 24 hours. All cryptocurrencies' combined trades volume is also on the higher side at $157 billion, as reported by CoinGecko. The dominance of Bitcoin stands at 59.1% and that of Ethereum stands at 9.05%. Investors and the crypto community are watching closely.
Why Crypto Market Up Today? Reason Triggers the Bullish Rally
CPI Report Injects Optimism Throughout the Sector
One of the key reasons behind this is the recent United States Consumer Price Index (CPI) numbers. The CPI report for April showed inflation at just 2.3%, which is slightly lower than the expected 2.4%. This is the lowest annual CPI reading since February 2021. Also, core CPI (which excludes food and energy prices) came in at 2.8%, exactly what analysts predicted.
Source: U.S. Bureau of Labor Statistics
This weaker inflation data gave investors hope that the U.S. Federal Reserve may avoid raising interest rates soon. As a result, buyers rushed into the crypto space, helping push token and coin prices higher. A key technical indicator, Bitcoin’s spot Taker Buy/Sell Ratio, also rose, suggesting that more people are buying than selling. Additionally, Bitcoin’s correlation with the global M2 money supply (a measure of how much money is circulating) continues to support bullish momentum.
Fed Keeps Rates Steady in May FOMC Meeting
Another factor lifting market sentiment is the outcome of the Federal Reserve’s recent meeting. In the May FOMC (Federal Open Market Committee) session, the Fed decided to keep the federal funds rate unchanged between 4.25% and 4.5%. This decision matched what the sector expected. It gave the crypto community more confidence that the economic environment could remain favorable for riskier assets like crypto.
The Fed's steady stance sent a positive signal to investors that the central bank may not tighten monetary policy aggressively in the near term. This also added to the buying pressure in the market. The next FOMC meeting is scheduled for June 17–18, 2025, which will include updated economic forecasts and policy outlook.
Liquidation Heatmap and Fear-Greed Index Also Tell a Story
According to CoinGlass, Over the past 24 hours, a huge number of traders were liquidated. In total, 138,811 traders saw their positions closed, with total liquidations reaching $411.47 million. The largest single liquidation happened on Binance in the ETH/USDT pair, worth $12.20 million.
Source: CoinGlass
Within just four hours, $82.31 million in positions were wiped out, most of them long trades. This kind of activity often adds fuel to price movement in either direction, and right now, it's pushing prices higher.
Meanwhile, the Crypto Fear and Greed Index is showing “Greed” at a value of 73. Just a month ago, the market was in “Fear” at 31. This shift shows that investors are becoming much more optimistic, though it also warns that markets could be overheated.
What’s Next for the Crypto Market?
Result of this, the cryptocurrency, including Bitcoin, Ethereum, XRP, and Solana, are all in green. BTC recorded an intraday surge of 0.37%, currently trading at $103,901.00. Ethereum Price, on the other hand, recorded an impressive surge of 5%, currently hovering at $2,603.01. Solana and XRP surge by over 3% and are currently trading at $180.37 and $2.60, respectively.
While today’s boost in crypto prices is largely driven by CPI data and FOMC decisions, traders should keep an eye on other upcoming economic events. Reports like the Annual Budget, FPI inflow/outflow data, and unemployment rates could affect market sentiment in the days ahead.
Additionally, the SEC recently delayed its decision on the Grayscale Solana and Litecoin ETF, which may also affect the investor's sentiment and their investment decisions.
Conclusion
The industry is gaining today due to softer inflation numbers, steady interest rates, and strong buying activity. Whether this uptrend will last depends on how upcoming data and global events shape investor expectations. For now, the bulls are in control.
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