The cryptocurrency market has taken a significant hit, with overall valuations plummeting by 20% and Bitcoin by 5%. This downturn is attributed to a mix of macroeconomic data and cautious Federal Reserve policies.

The market's reaction to recent economic indicators has been mixed. While the Consumer Price Index (CPI) and Core CPI were below expectations, hinting at possible rate cuts, the Producer Price Index (PPI) reflected a slowing down of inflation rates. However, Federal Reserve Chair Jerome Powell's hawkish speech and the projected rate cuts for 2024 have led to a paradox, where the Fed's cautious approach may negatively impact the market.

Treasury bond yields have been volatile, with the yield on two-year bonds falling to a two-month low. Although this is generally bullish for risk-on assets like Bitcoin, the strong USD has put pressure on cryptocurrencies. In contrast, gold has experienced upward momentum, further highlighting the divergence in asset behavior amid similar economic conditions.

Bitcoin's price has been on a bearish rally, dipping from an intra-week high of $70,059 to a weekly low of $65,267. At press time, it was trading at $66,320, a 1.29% drop from the 24-hour high. Major cryptocurrencies like XRP have also experienced a decline, but corrected by allowing bulls to seize market control.

The lack of momentum in the crypto markets can be linked to regulatory uncertainties, such as the pending decision on the Ethereum ETF. However, bullish momentum has reignited in the ETH market with the updated timeline for a Spot Ethereum ETF by July 2nd.