Bitcoin Drops Below $65,000 as US Inflation Data Looms; Altcoins Slide

Bitcoin's slide continued on Tuesday, with the world's largest cryptocurrency dropping below the $65,000 mark for the first time in weeks. The decline comes as traders across global markets brace for the latest US inflation data, due later this week, which could shape the Federal Reserve's next move on interest rates.

The price action was not isolated to Bitcoin. Ethereum, the second-largest digital asset, fell alongside a basket of major altcoins, including Binance Coin, Solana, and Ripple, as selling pressure spread across the crypto market. At press time, Bitcoin was trading around $64,800, down nearly 3% over the past 24 hours, according to data from leading exchanges.

Inflation Data in Focus

Investors are positioning cautiously ahead of the release of the US Consumer Price Index (CPI) report, scheduled for Wednesday. The data is expected to show whether inflation is cooling enough for the Fed to consider cutting rates later this year. A hotter-than-expected reading could dampen hopes of monetary easing, which has been a key driver of risk assets, including cryptocurrencies.

"The market is holding its breath," said one Mumbai-based crypto trader, who asked not to be named. "A strong CPI number could push Bitcoin lower, but a soft one might trigger a quick rebound." Analysts note that Bitcoin's recent rally to record highs earlier this summer was partly fueled by expectations of lower borrowing costs, making the upcoming data a pivotal moment for the asset class.

Altcoins Follow Bitcoin Lower

Ethereum, which had been trading above $3,500 just a few days ago, slipped to around $3,400, mirroring Bitcoin's downward move. Other major coins suffered steeper losses, with some smaller tokens shedding 5-7% in the last 24 hours. The sell-off has wiped out billions of dollars from the total crypto market capitalization, which now stands at roughly $2.3 trillion, down from $2.5 trillion at the start of the week.

Liquidations have also picked up, with data from Coinglass showing over $200 million in leveraged positions wiped out in the past day. Most of the losses were concentrated in long positions, as traders who bet on higher prices were caught off guard by the sudden drop.

Market Sentiment Turns Cautious

The mood among Indian crypto investors has turned notably cautious. Local exchanges reported a pickup in selling activity, though volumes remain modest compared to the frenzy seen earlier in the year. "Retail interest is still there, but people are waiting for clarity on the macro front," said a Delhi-based analyst.

Regulatory uncertainty at home adds another layer of caution. While the government has not made any new announcements this week, the lack of a clear policy framework continues to weigh on the sector, keeping some institutional money on the sidelines.

What to Watch Next

All eyes will be on the CPI print on Wednesday. A figure in line with expectations could help Bitcoin stabilise above $64,000, while a surprise upside could open the door to further downside, with $62,000 seen as the next key support level. Conversely, a weak inflation number might reignite buying interest and push prices back toward $67,000.

For now, traders are advised to keep a close watch on volatility, as the crypto market often reacts sharply to macro data. The coming days will likely set the tone for the rest of August.