Crypto markets are deep red on Monday, with industry leader bitcoin sliding lower before a packed week of economic data.

At press time, bitcoin BTC$68,470.69 traded near $68,200, down nearly 3% over 24 hours, with XRP XRP$1.4745, ether ETH$1,967.90, DOGE$0.1025 registering much bigger losses. Losses hit 85 of the top 100 tokens by market cap, with privacy coins like monero XMR$319.55 and zcash ZEC$285.36 down 10% and 8%, respectively.

Smart contract tokens bled too, with the CoinDesk Smart Contract Platform Select Capped Index down nearly 6%, pushing its year-to-date drop to 28%.

The market weakness looks particularly disappointing against the backdrop of the weak U.S. consumer price index data released last week that kept hopes of Fed rate cuts alive.

The CPI growth slowed to 2.4% year-on-year in January from 2.7% in December, the official data showed, reinforcing expectations for at least two 25 basis point rate cuts by the Fed this year. This resulted in the 10-year U.S. Treasury yield falling to 4.05%, the lowest since early December. Bitcoin rallied, rising from nearly $66,800 on friday to over $70,000 over the weekend, but failed to establish a foothold there.

Vikram Subburaj, CEO of the India-based regulated Giottus exchange, said selective demand is the reason why rallies struggle to hold.

"Risk appetite stayed selective and macro cross-currents kept traders defensive. In derivatives, the market continues to behave as if it is ‘de-leveraging first, asking questions later.’ Rallies have struggled to hold and dips are being bought only selectively near obvious levels," he said in an email to CoinDesk.

Macro heavy weak

A packed week of macro data lies ahead, with traders eyeing the minutes of the January Fed meeting and the release of the Fed's preferred inflation gauge, the core personal consumption expenditures price index (PCE), for fresh positioning signals.

"PCE inflation, the Fed’s preferred measure, will be closely monitored for confirmation that price pressures are moderating, particularly after CPI showed only gradual disinflation and inflation remains above the 2% target," Dessislava Laneva, Nexo dispatch analyst, said in an email.

"Markets will assess both the monthly momentum and year-on-year trend for implications for the policy path." Laneva added.

In traditional markets, Mark Nash of Jupiter Asset Management, a high-profile yen bear has flipped bullish, forecasting 8–9% yen appreciation, particularly against the Swiss franc.

The yen and bitcoin have hit a record positive correlation in recent months, which makes any yen strength a key catalyst for bitcoin bulls.