TLDR:
- April CPI came in at 3.8% YoY, beating estimates and erasing all Fed rate cut expectations for 2026.
- Bitcoin dropped 5.7% to $78K, rejected five times at the 200-day MA amid rising macro pressure.
- BTC spot ETFs recorded $1B in weekly outflows, snapping six consecutive weeks of positive inflows.
- Ethereum fell 10.2% on the week, underperforming Bitcoin as ETH/BTC ratio pressed toward 0.0275.
Bitcoin faced a sharp pullback this week as hotter-than-expected inflation data rattled crypto and broader financial markets.
April’s CPI came in at 3.8% year-over-year, beating the 3.7% consensus estimate. The 10-year Treasury yield surged 28 basis points to 4.58%, its highest since September 2025.
Rate cut expectations evaporated almost overnight, with markets now pricing a 44% chance of a December hike.
Macro Pressure Hits Crypto Harder Than Equities
The inflation report landed at a difficult time for risk assets. Core CPI rose 0.4% month-over-month, signaling that price pressures are no longer easing. Real wages turned negative for the first time in three years, adding to concerns about consumer strain.
The Trump-Xi summit offered little relief. Markets had hoped for a breakthrough, but the meeting produced only a vague “constructive strategic stability” framework.
A 200-plane Boeing order fell short of expectations, and Xi issued a fresh warning on Taiwan. The U.S. also confirmed it was not seeking China’s assistance on Iran.
Kevin Warsh was confirmed as Federal Reserve Chair by a 54-45 vote, the narrowest margin in modern history. He takes over on June 16-17 for the FOMC meeting, which will include updated economic projections. His known hawkish stance adds further weight to the rate hike conversation.
Cross-asset performance told a clear story this week. Brent crude gained 8.6%, while gold fell 3.8% despite ongoing geopolitical tensions. Long-duration Treasuries dropped 2.8%. The assets causing inflation performed well; everything else did not.
Bitcoin ETF Outflows Snap Six-Week Inflow Streak
As @wintermute_t noted, “when leverage is the marginal buyer, the unwind is fast.” BTC briefly crossed $82,000 following the CLARITY Act vote in the Senate banking committee, then reversed sharply. It closed Friday near $78,000, down 5.7% on the week, before sliding further toward $77,000 over the weekend.
The weekend move triggered $657 million in liquidations, with $584 million coming from long positions. Ethereum performed even worse, falling 10.2% on the week. The ETH/BTC ratio pressed to 0.0275, with funding softer and relative implied volatility elevated.
ETF flows reversed course after six straight weeks of inflows. Bitcoin spot ETFs recorded $1 billion in outflows for the week. Ethereum ETFs shed $255 million.
Glassnode data showed institutions were selling into strength, with the seven-day net flow average at -$88 million per day, the worst reading since mid-February.
Support for BTC sits between $76,000 and $78,000. A break below $75,000 could open the door to the low $70,000 range.
Tokenized Treasuries reached $15 billion on-chain, continuing a steady growth trend. The CLARITY Act still requires a full Senate floor vote before becoming law.
