Bitcoin, Ethereum, XRP, Dogecoin Plummet as Fed's Favorite Inflation Gauge Hits 3-Year High: Analyst Weighs If July Will Bring Relief to BTC Investors

💡 Bitcoin and its altcoin peers are plummeting as the Fed's preferred inflation gauge hits a 3-year high, raising concerns about a prolonged rate-hiking cycle.

The Federal Reserve's favorite inflation gauge has hit a 3-year high, sending shockwaves through the crypto market, with Bitcoin, Ethereum, XRP, and Dogecoin plummeting in tandem.

The Personal Consumption Expenditures (PCE) price index, which the Fed closely monitors, rose 4.7% year-over-year in May, its highest level since January 2020. This unexpected surge has sparked concerns that the Fed will maintain its hawkish stance and prolong the rate-hiking cycle.

Crypto Market in Turmoil

The crypto market is reeling from the Fed's hawkish surprise, with Bitcoin and its altcoin peers plummeting in value. $BTC, the flagship cryptocurrency, has dropped over 10% in the past 24 hours, while $ETH, the second-largest cryptocurrency by market capitalization, has fallen by nearly 12%.

What's Driving the Sell-Off?

The sudden sell-off in the crypto market can be attributed to the Fed's decision to maintain its hawkish stance, despite expectations of a dovish pivot. The PCE price index's surge above 4.5% has led investors to reassess their expectations of the Fed's future policy decisions, sparking a wave of selling across the crypto market.

Will July Bring Relief to BTC Investors?

Analysts are weighing the possibility of a relief rally in July, with some predicting a bounce back in the crypto market if the PCE price index shows signs of slowing down. However, others are warning that the Fed's hawkish stance will continue to weigh on the crypto market, at least in the near term.

What It Means for Investors