Crypto Market Sheds $90B as Fed Rate Cut Expectations Wane

Key Facts

The cryptocurrency market experienced a significant sell-off, losing nearly $90 billion in total value and pushing the aggregate market capitalization close to the $2.6 trillion support level. According to reports, Bitcoin and XRP prices remain under heavy selling pressure triggered by elevated inflation data. This shift has led to reduced expectations for Federal Reserve interest rate cuts in 2026, negatively impacting risk-sensitive digital assets.

This market retreat aligns with US economic data showing accelerated inflationary pressures, as the annual inflation rate hit 3.8% on May 12, 2026, exceeding the 3.7% forecast per market data. Additionally, the Core CPI rose to 2.8% year-over-year, strengthening the Federal Reserve's case for maintaining a restrictive monetary policy for a longer duration, which continues to weigh on crypto valuations relative to traditional benchmarks.

Traders should closely monitor current support levels as volatility remains high in the absence of immediate bullish catalysts. Looking ahead at the economic calendar, market participants will focus on upcoming Fed official speeches for policy clues, especially after US Existing Home Sales were reported at 4.02 million units as of May 11, 2026, signaling a broader economic environment that may constrain liquidity flows into the crypto sector.