The crypto market experienced a rollercoaster week as macroeconomic data and central bank decisions reshaped investor sentiment. A surprise drop in U.S. inflation data briefly lifted Bitcoin above $70,000, only for gains to reverse after the Federal Reserve signaled patience on rate cuts. This report dives into the technical, emotional, and macro-driven forces shaping the current market landscape.
Key Market Events: CPI and FOMC Drive Volatility
On June 12 at 8:30 PM Beijing time, the U.S. Consumer Price Index (CPI) came in below expectations — a development that initially sparked optimism across financial markets. Bitcoin responded swiftly, climbing from $68,000 to $70,000 within minutes — a 3% surge. The rally reflected hopes that cooling inflation could pave the way for future interest rate cuts.
However, just hours later, on June 13 at 2:00 AM Beijing time, the Federal Open Market Committee (FOMC) announced it would hold interest rates steady. In his press conference, Chair Jerome Powell tempered expectations, stating that rate cuts in the near term are “not appropriate”. He emphasized that the Fed needs to see more consistent progress toward its 2% inflation target before considering policy easing.
As a result, Bitcoin reversed course, dropping from $70,000 to $67,000 — a decline of 4.3% — erasing earlier gains. Ethereum followed a similar trajectory, reflecting tight correlation between major digital assets during macro-driven events.
👉 Discover how real-time macro events impact crypto prices — stay ahead with actionable insights.
With the next FOMC meeting scheduled for August 1, 2025, investors have approximately 45 days to monitor incoming economic data for clues about the Fed’s next move.
Technical Analysis: Price Action and Volume Trends
Price Performance
Over the past week:
- Bitcoin (BTC) declined by 5.69%
- Ethereum (ETH) fell by 9.02%
Both assets showed heightened volatility around key news events but ultimately ended lower, indicating underlying bearish pressure despite short-term rallies.
Support and Resistance: Breaking Below Key Zones
BTC and ETH both broke below their previous zones of high trading volume, entering a period of consolidation at lower levels. This downward breakout suggests weakening bullish momentum and potential retesting of lower support levels.
Volume and Open Interest
Trading volume spiked on June 7, coinciding with an initial market downturn. A secondary volume peak occurred on June 12, aligned with the CPI release and FOMC decision — highlighting strong trader engagement during macro events.
Despite increased activity, open interest for both BTC and ETH declined over the week, signaling a net reduction in leveraged positions. This contraction often precedes periods of consolidation or extended sideways movement.
Interpreting Candlestick Color Coding:
- Green: Price rise supported by volume (bullish accumulation)
- Red: Price drop with active liquidation (bearish pressure)
- Yellow: Gradual position buildup (neutral sentiment)
- Black: Congested market conditions (uncertainty)
Volatility Metrics
- Historical volatility for both BTC and ETH peaked on June 12 due to the CPI announcement.
- Implied volatility has since declined, suggesting reduced expectations for large price swings in the near term.
Yellow line = Historical volatility | Blue line = Implied volatility | Red dot = 7-day average
Lower implied volatility may indicate waning demand for options protection — a sign of cooling fear or complacency ahead of the next major catalyst.
Market Sentiment Indicators
Momentum Comparison Across Asset Classes
Among major asset classes over the past week:
- Nasdaq Composite showed the strongest performance
- Bitcoin underperformed all others
This highlights a rotation back toward traditional tech equities when macro risks emerge, underscoring crypto’s still-speculative status in broader portfolios.
👉 Compare crypto against global markets and uncover hidden momentum trends.
Lending Rates: Rising Short-Term USD Yield
The average annualized USD lending rate stood at 10.4%, with short-term rates climbing to around 11.2%. Higher borrowing costs reflect increased demand for stablecoin leverage or hedging activity during volatile periods.
Funding Rates and Derivatives Sentiment
- BTC funding rate averaged an annualized 11%
- Remained within normal range across major exchanges
Stable funding rates suggest no extreme long or short positioning — derivatives markets are not overheated, reducing risk of a violent squeeze.
Market Correlation: High Uniformity Across Altcoins
Correlation among a basket of 129 major cryptocurrencies rose to approximately 0.9, indicating highly synchronized price movements. When correlations approach 1.0, individual coin fundamentals matter less than broad market direction — a hallmark of risk-on or risk-off environments.
High correlation means diversification benefits diminish; traders should focus on overall market trend rather than isolated altcoin plays.
Market Breadth: Bearish Signal Across the Board
Key breadth metrics reveal weak underlying health:
- Only 5.5% of selected coins trade above their 30-day moving average
- Just 7.8% of altcoins outperform BTC
- Only 7% are trading more than 20% above their 30-day low
- Merely 6.3% are within 10% of their 30-day high
These figures point to a market in retreat — most assets are in downtrends, with limited signs of recovery or leadership.
Frequently Asked Questions (FAQ)
Q: Why did Bitcoin drop after the Fed held rates steady despite lower CPI?
A: While lower inflation is positive, the Fed’s cautious stance signaled that rate cuts aren’t imminent. Markets had priced in earlier easing, so Powell’s comments triggered profit-taking and risk-off behavior.
Q: What does declining open interest mean for crypto prices?
A: Falling open interest during price declines often indicates deleveraging. Traders are closing positions, which can lead to reduced volatility but also weaker upward momentum until new capital enters.
Q: How reliable are funding rates as sentiment indicators?
A: Funding rates are highly effective short-term gauges. Positive rates suggest long dominance; negative rates signal short dominance. Extreme values often precede reversals.
Q: Why is high market correlation important?
A: When correlations are high, most coins move together regardless of fundamentals. It becomes harder to "pick winners," and sector rotation strategies lose effectiveness.
Q: What should traders watch ahead of the August FOMC meeting?
A: Upcoming employment reports, PCE inflation data, and geopolitical developments will influence Fed policy expectations. Crypto markets will likely remain sensitive to any shifts in monetary outlook.
Q: Can crypto decouple from traditional markets?
A: Occasionally — such as during major on-chain upgrades or regulatory clarity — but structural dependence on liquidity conditions keeps crypto tightly linked to macro trends for now.
Conclusion: Cautious Sentiment Amid Macro Uncertainty
The past week underscored how deeply cryptocurrency markets remain tied to macroeconomic forces. While cooler inflation data briefly reignited bullish hopes, the Fed’s commitment to data-dependent policy cooled enthusiasm.
Technically, BTC and ETH face resistance near $70,000, with declining breadth and open interest suggesting limited upside without fresh catalysts. High inter-market correlation reinforces the need for macro awareness over isolated technical plays.
As we head toward the August FOMC meeting in 2025, traders should monitor inflation prints, employment trends, and shifts in funding dynamics. In this environment, risk management and sentiment tracking are just as critical as chart analysis.
👉 Get real-time market intelligence and prepare for the next big move in crypto.
Core Keywords: Bitcoin price analysis, Ethereum market trends, crypto sentiment indicators, FOMC impact on crypto, CPI effect on Bitcoin, market correlation in crypto, funding rate analysis, open interest trends