Crypto Volatility Persists as Inflation Cools and Bitcoin Holds Steady

The cryptocurrency market remained volatile for a second consecutive day after U.S. Consumer Price Index (CPI) data came in softer than expected.

Bitcoin (BTC) is trading at $104,000 – up 1% on the day and 10% over the past week. Ethereum (ETH) increased 3% over the past 24 hours to $2,575. Solana (SOL) is flat at $176, while XRP is down 1%, now trading at $2.55.

The total cryptocurrency market capitalization decreased by 2% on the day to approximately $3.46 trillion, according to CoinGecko. Leveraged liquidations in the past 24 hours came in at $528 million, according to CoinGlass. ETH led the liquidations with $130 million, while BTC followed with $122 million.

Spot Bitcoin exchange-traded funds (ETFs) recorded modest inflows of $5 million on May 12, while spot Ethereum ETFs experienced approximately $18 million in outflows, effectively canceling out the inflows they recorded on May 9, according to SoSoValue data.

Inflation Cools

U.S. inflation eased to a four-year low in April, with the CPI rising 0.2% for the month (vs. 0.3% forecast) and 2.3% year-over-year (vs. 2.4% forecast) – the lowest annual rate since February 2021. The Core CPI also increased 0.2% on the month and 2.8% on an annualized basis, keeping inflation just above the Federal Reserve’s 2% target.

Dr. Kirill Kretov at CoinPanel said that today’s market sentiment was heavily influenced by this data.

“While inflation isn’t a direct measure of Bitcoin’s long-term success, it plays a critical role in shaping the macro environment that supports crypto markets, liquidity conditions, interest rates, and investor risk appetite,” he said. “As markets recalibrate their expectations based on today’s softer inflation data, we should be prepared for continued volatility and sharp, sentiment-driven moves."

Tariff Relief

Tuesday’s volatility followed a weekend-long rally fueled by President Donald Trump’s agreement to pause Chinese tariffs for three months.

Paul Howard, Senior Director at Wincent, explained that as uncertainty surrounding tariffs begins to ease, the longer-term focus will shift toward how institutions adapt to the policy changes implemented by the Trump administration.

"Over the past 24 hours, alternative assets haven't shown significant divergence from broader market segments,” said Howard. “In fact, there's been a slight pullback, with higher-risk assets generally bouncing in tandem.”

This evolving landscape could boost institutional participation, supporting stronger altcoins while weaker projects may phase out, Howard added.