On Wednesday, Bitcoin and several altcoins experienced significant price declines, primarily due to unexpected U.S. inflation data signaling higher interest rates. Bitcoin fell 3%, with Litecoin dropping over 11%. Inflation concerns led to decreased market confidence, prompting significant sell-offs across cryptocurrencies.

On Wednesday, cryptocurrency prices, including Bitcoin and notable altcoins, experienced a considerable downturn following the release of unexpected U.S. consumer inflation data. Bitcoin (BTC) saw a decline of 3%, while Litecoin (LTC) dropped significantly by over 11%. Additionally, both Shiba Inu (SHIB) and Solana (SOL) fell more than 5%, contributing to a 3% decline in the total cryptocurrency market cap, now at $3.11 trillion.

The catalyst for this market sell-off was a report indicating a rise in U.S. inflation in January, which could persist in the following month. The headline Consumer Price Index (CPI) increased from 0.4% in December to 0.5% in January, exceeding median estimates. This escalation resulted in an annual rise of 3.0%, marking the highest inflation rate in months, alongside a rise in core consumer inflation.

The impact of these inflation figures extended to U.S. stock futures, causing the Dow Jones and Nasdaq 100 indices to fall over 400 points. U.S. bond yields also surged, with the 10-year and 30-year yields reaching 4.63% and 4.82%, respectively. These developments fueled market apprehension regarding prolonged periods of elevated interest rates, a sentiment echoed by Federal Reserve Chair Jerome Powell, who indicated no urgency to reduce rates.

In summary, the decline in cryptocurrency prices, particularly Bitcoin and altcoins like Litecoin, Shiba Inu, and Solana, can be attributed to heightened U.S. inflation reports that suggest sustained interest rates may remain in place. The Federal Reserve’s stance on inflation management indicates a challenging environment for these assets, as higher rates often correlate with declining cryptocurrency values.

Original Source: crypto.news

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