Market Volatility Amid Rising Inflation
On April 19, 2025, the cryptocurrency market faced sharp volatility as 1-year inflation expectations jumped to 6.7%, the highest level since November 1981. This marked a 1.7 percentage point increase from the prior month and the fourth consecutive monthly rise exceeding 0.5 points, signaling entrenched inflationary pressures (The Kobeissi Letter).
Immediate Crypto Market Reactions
- Bitcoin (BTC): Dropped 4.2% to $64,800 (10:00 AM UTC).
- Ethereum (ETH): Fell 3.8% to $3,200 (same time).
(Source: CoinMarketCap)
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Shifts in Trading Strategies
Volume Surges in Key Pairs
| Trading Pair | Volume Increase | Total Volume (First Hour) |
|--------------------|----------------|---------------------------|
| BTC/USDT | 22% | 1.5M BTC |
| ETH/USDT | 19% | 7.3M ETH |
(Data: Binance)
Sentiment Decline
- Crypto Fear & Greed Index: Dropped from 62 (Greed) to 55 (Neutral) in one day (Alternative.me).
Technical and On-Chain Indicators
Key Metrics Post-Announcement
- Bitcoin RSI: Fell from 70 (overbought) to 62 (neutral) by 11:00 AM UTC (TradingView).
- Ethereum MACD: Shifted from bullish to bearish at the same time.
- Bitcoin Hash Rate: Declined 3% to 320 EH/s by noon UTC (Blockchain.com).
- Ethereum Active Addresses: Dropped 5% to 450,000 by 1:00 PM UTC (Etherscan).
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FAQs
How does inflation affect crypto prices?
Rising inflation expectations increase volatility as investors hedge against asset devaluation.
What trading pairs saw volume spikes?
BTC/USDT and ETH/USDT volumes surged by 22% and 19%, respectively.
Which indicators are critical now?
Monitor RSI, MACD, hash rate, and active addresses for real-time sentiment shifts.
Will inflation-driven volatility persist?
Short-term caution is likely until macroeconomic clarity emerges.
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