Crypto Market Crashes Ahead of US CPI: Rally if 2.8% or Below, Sharp Drop if Higher

The macroeconomic events are once again taking a toll on the investors as the crypto market crashes today. Not only the U.S. investors but the global ones are eyeing the CPI (Consumer Price Index) data release today, whose result could make or break the financial markets. Now, as the results are awaited, the concerns about the potential outcome are pulling down the digital assets and their prices.

Crypto Market Crash: Bitcoin, XRP, SOL, and Other Dips Ahead of CPI

Just a day after the digital assets’ collective market cap surpassed the $4 trillion market, a downtrend began today. With the BTC price dropping below $120k, currently at $118.8k, and the rest of the altcoins following along, the crypto market is crashing today.

The crypto heatmap is stained in red, but there are also a few exceptions, including Ethereum. This is due to the BlackRock ETH ETF crossing $10B inflows and crypto whales accumulating.

Interestingly, the market events and activities indicate a bullish vibe in the crypto community, especially Paul Atkins’ comments on the XRP lawsuit, crypto whales going big on buying, and others.

However, today’s U.S. Consumer Price Index data release is keeping the market grounded, affecting the XRP, currently trading at $3.15 after a 4.5% decline, SOL at $175.68 after a 4.6% decline, and others.

What to Expect From The U.S. CPI Data?

Reuters experts expect that the consumer price will likely increase by around 0.2% in July, which is slightly lower than June’s 0.3% increase. In addition, the early inflation rate is expected to come around 2.8%, up from June’s CPI data.

Even the core inflation, excluding the volatile food and energy prices, may come at 0.3%. If this happened, it would become the largest monthly gain in six months, due to Trump’s tariffs on imports. Interestingly, the correlation between the U.S. Consumer Price Index data and the Fed’s rate decisions is closely connected, as CPI measures inflation.

Now, the Fed has kept interest rates unchanged this month, but there’s high anticipation for potential rate cuts in September. As a result, this data, along with other macroeconomic events this week, could make or break the market.

Will the Crypto Market Crash Further?

The current crypto market crash hints that investors are cautious about the Consumer Price Index release today. A CPI at or below 2.8% would favor the odds of the rate cuts, hence bullish for the financial market and weaken the dollar. However, higher-than-expected data could bring further volatility in crypto, stocks, and other assets, as the dollar strengthens.

🇺🇸 US CPI data is coming today at 8.30 am ET, one hour before the US market opens.

( Short – Lower CPI = Fed Rate cuts = More liquidity flows to market = Pump )

So the Expected CPI today is 2.8%,
But We believe it will be 2.8% or lower.

If the CPI is 2.8% or lower = Pump
if… pic.twitter.com/LZ8YpvAClo

— Bull Theory (@BullTheoryio) August 12, 2025

However, experts also note that it would not exactly influence the Fed’s decision as the labor market is down. Overall, there’s a lot of uncertainty, and the digital assets’ performance can vary significantly.