Bitcoin (BTC) fell below $49,000 Tuesday after a hotter-than-anticipated U.S. inflation reading weighed on interest-rate cut expectations.
The largest crypto by market capitalization slipped about 2% to $48,700 from slightly above $50,000 earlier in the day, while the broad-market crypto index CoinDesk 20 (CD20) lost 2.4%.
The drop happened after the January Consumer Price Index (CPI) report showed 3.1% year-on-year inflation, faster than analysts' 2.9% forecast. Market participants now see only a 34% chance of the Federal Reserve cutting interest rates in May, down from 52% a day ago, according to the CME FedWatch tool.
The lower chance of an imminent rate cut weighed on traditional markets as well. The 10-year U.S. Treasury bond yield advanced 12 basis points, while the S&P 500 equity gauge and the tech-heavy Nasdaq Composite Index declined as much as 2%.
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