Editor’s Note
This analysis highlights a divergence in market reactions to cooling U.S. inflation data. While traditional assets like bonds and precious metals rallied, the cryptocurrency sector bucked the trend, trading lower amid prevailing negative sentiment.
Negative sentiment prevails in the crypto markets even as global markets reacted to the cooling trend in inflation revealed by the latest U.S. CPI reading. While precious metals rallied, major cryptocurrencies are trading with overnight losses. Bond yields also eased emphatically across regions while the six-currency Dollar Index edged up.
Data released by the U.S. Bureau of Labor Statistics on Friday showed annual headline inflation at 2.4 percent in January, declining from 2.7 percent in December and falling below market expectations of 2.5 percent. The core component thereof declined to 2.5 percent from 2.6 percent in the previous month in line with expectations.
Headline inflation on a month-on-month basis which was expected to remain steady at 0.3 percent unexpectedly declined to 0.2 percent. The core component thereof increased from 0.2 percent to 0.3 percent as expected by markets.
Nevertheless, markets responded to the cooling inflation in a divergent manner. The dollar index which measure’s the dollar’s strength against a basket of six currencies and a perceived proxy for interest rate expectations from the Federal Reserve, is trading flat at 96.93.
However precious metals have recorded strong gains. While gold is trading with overnight gains of 1.5 percent, silver has added 3.7 percent, and platinum has rallied 2.5 percent on a daily basis.
Among digital currencies, Bitcoin, Ethereum, XRP, BNB, Solana etc. are all trading with heavy overnight losses. Overall cryptocurrency market capitalization has also declined 0.91 percent to $2.3 trillion. The 24-hour trading volume has also increased 6 percent overnight to $98 billion.
Sentiment was impacted by bearish market outlooks as well as pervasive fear.
Bitcoin, the largest cryptocurrency has lost more than 1 percent in the past 24 hours to trade at $67,440.69. The current price is around 47 percent below the all-time high of $126,198.07 recorded on October 7, 2025. The original cryptocurrency has lost 0.5 percent in the past week and is grappling with year-to-date losses of close to 23 percent. The 24-hour trading ranged between $67967.02 and $65,092.11.
Bitcoin is continuing in the 13th position in the global ranking of all assets as per market capitalization published by companiesmarketcap.com.
Bitcoin Spot ETF products in the U.S. witnessed net outflows rising to $410 million on Thursday from $276 million a day earlier. iShares Bitcoin Trust ETF (IBIT) topped with outflows of $158 million followed by Fidelity Wise Origin Bitcoin Fund (FBTC) that recorded outflows of $104 million.