Latest CPI data reveals US inflation hitting 3% year-over-year on February 12, 2025, with core inflation at 3.3%. Surpassing expectations, this report has sent shockwaves through the crypto community, resulting in a 5% market cap drop and Bitcoin falling below $95,000.

The surge in inflation to its highest levels since June 2024 has sparked concerns among market players, who fear an earlier-than-expected policy tightening by the Fed. This has led to a shift towards safer assets, impacting the crypto market. Short-term volatility is expected as traders realign their strategies.

Investors are closely monitoring the situation, with some considering moving out of crypto into less volatile options, potentially increasing price fluctuations. Stability may only return once clearer signals are provided by the Fed.

Federal Reserve Chairman Jerome Powell's recent remarks at the Senate Banking Committee and President Trump's push for rate cuts have added to the market uncertainty. Analysts predict ongoing adjustments until more policy updates are announced.

The market, still recovering from recent tariff tensions, witnessed a significant $2 billion liquidation on February 3, possibly surpassing levels seen in the 2022 FTX collapse. Following a slight rebound post the tariff pause, today's inflation data has reignited short-term bearish sentiments.

Despite the current 'Fear' on Bitcoin's Fear and Greed index and speculations of a potential drop to $70,000 in the current macroeconomic climate, long-term forecasts remain optimistic. Analysts believe Bitcoin will likely hit new all-time highs by the year's end, offering hope amidst the market fluctuations.