Crypto Market Correction: Altcoins Retreat After Brief Inflation Rally
Following an initial boost from inflation data, the cryptocurrency market experienced a rapid correction on Thursday morning. Altcoins including Dogecoin (DOGE), Solana (SOL), and Cardano (ADA) saw sharp sell-offs as traders shifted capital towards Bitcoin (BTC) and Ethereum (ETH).
Key Market Movements
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Altcoin Correction: DOGE dropped 5.8% ($0.015) to $0.19, SOL fell 3.9% to $157.89, ADA declined 5.1%, TRX dropped 6.8% ($0.018), AVAX fell 5.4% ($0.97) to $20.83, SUI dropped 5.6% to $3.27, and LINK fell 6.7% to $14.15 over the past 24 hours. XRP also shed 3.7% to $2.23.
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BTC/ETH Stability:Despite broader altcoin declines, leading cryptocurrencies Bitcoin and Ethereum remained relatively resilient, with losses below 2% and 1.5% respectively.
Market experts describe the altcoin rout as a routine market reaction rather than a signal of a fundamental shift in sentiment. The brief market euphoria over cooling inflation appeared to fade quickly, with trading activity rotating away from riskier assets.
Expert Analysis
“While it may seem surprising… these market moves are less dramatic than they appear at first glance,” explains Dr. Kirill Kretov, Senior Automation Expert at CoinPanel. He notes altcoins “remains riskier than Bitcoin and Ethereum” and characterizes sub-5% swings as market “noise”.
Tracy Jin, COO of MEXC, attributes the decline partly to profit-taking, particularly in volatile assets, alongside macroeconomic headwinds. “The strengthening of the US dollar and the growth of government bond yields, which traditionally reduce the attractiveness of risky assets,” she notes, adding these factors were also evident yesterday following the inflation data.
Paul Howard of Wincent adds perspective, suggesting the current decline for “the ‘Made in USA’ basket” coins like DOGE falls within expected trading ranges, though he singles out DOGE for specific concern related to recent public events.
Inflation Data Reaction
The correction occurred after yesterday’s inflation data had briefly boosted sentiment. The May Consumer Price Index showed a 2.4% rise, the lowest figure since June 2023, exceeding analyst expectations. This initially lifted Bitcoin (+0.5%) and altcoins (SOL +1.7%), briefly cooling concerns about persistent inflationary pressures.
