Cryptocurrency Prices Decline Amid Cooling Inflation and Market Uncertainty

June 12, 2025 | Damian Chmiel

In a recent downturn across the cryptocurrency market, major cryptocurrencies such as Bitcoin, Ethereum, XRP, and Dogecoin have all seen declines in their prices. This trend follows the release of the latest U.S. Consumer Price Index (CPI) data, which, while initially signaling a positive reaction in the market, ultimately contributed to a shift in investor sentiment and a correction.

Market Overview: Major Cryptocurrencies Take a Hit

As of Thursday, Bitcoin is trading around $107,634 after earlier hitting a peak above $110,000. This represents a 1.4% decrease from its previous close. Ethereum experienced a similar trajectory, initially climbing to $2,878 but closing at $2,720, representing a 1.6% drop. Currently, Ethereum is hovering close to $2,750, reflecting a struggle to maintain momentum above critical resistance levels.

XRP’s price has faced consistent pressure, declining to $2.23, which is a 1.4% decrease. The token had recently peaked at $2.3368 but has been unable to sustain that upward trend due to ongoing regulatory uncertainties. Dogecoin, the popular meme-based cryptocurrency, mirrored this negative sentiment, falling to $0.19 after initially rising above $0.20. ## Reasons Behind the Market Decline

Several factors are contributing to the current downturn in the cryptocurrency market. Initially, the U.S. inflation data released on Wednesday showed an annual inflation rate of 2.4%, slightly below the anticipated 2.5%. While this news brought a momentary boost to crypto prices, caution has prevailed as investors remain anxious about broader economic conditions, especially concerning the ballooning U.S. debt.

Analysts point to stalled negotiations in trade between the U.S. and China, with U.S. Treasury Secretary Scott Bessent’s comments reinforcing negative market sentiment. This uncertainty has triggered a “risk-off” approach among investors, amplifying volatility across all financial markets.

“The latest U.S. CPI data was somewhat reassuring, suggesting inflation may be easing,” said Dr. Kirill Kretov from CoinPanel. “However, with market liquidity being thin, even moderate trades can significantly impact prices.”

The situation has been further exacerbated by massive liquidations in the futures market, with over $683.4 million in crypto futures being liquidated within a 24-hour span. Most of this came from long positions, illustrating how overleveraged bullish bets can lead to swift corrections when the market turns.

Technical Analysis and Market Predictions

From a technical perspective, the total cryptocurrency market capitalization has dropped below the crucial $3.35 trillion support level, triggering algorithmic selling and stop-loss orders. As a result, the entire market is feeling the weight of increased downward pressure.

Despite the current volatility, many analysts remain cautiously optimistic about the long-term outlook for Bitcoin. Predictions for June 2025 suggest a trading range between $100,000 and $120,000, with some bullish scenarios projecting even higher price levels. Bitfinex targets a potential price of $115,000 by early July, while Fundstrat’s Tom Lee envisions targets as high as $150,000 to $250,000 by the end of the year.

Ethereum’s outlook also remains positive, with projections indicating a recovery toward the $2,800-$2,900 zone if momentum picks up mid-month. Conversely, if macroeconomic conditions worsen, Ethereum could face downtrends towards $2,280. ## Conclusion: Navigating Uncertainty in the Crypto Market

The current decline in cryptocurrency prices highlights the volatility and unpredictability inherent in the blockchain-driven financial landscape. As investors and analysts track these fluctuations, they must navigate a complex set of economic indicators and market sentiment.

The coming weeks will be pivotal as market participants await further developments and potential shifts in trading conditions. With significant price movements expected as the summer progresses, stakeholders will be keenly observing both macroeconomic trends and the evolving dynamics of the digital asset market.