Bitcoin and Ethereum prices were shaken by June's high inflation.

Historic inflation is pushing up prices everywhere, including the crypto market.

Bitcoin and ethereum prices recovered Thursday after plunging Wednesday after June's inflation report showed prices rose 9.1% year-over-year. Bitcoin and ethereum both increased more than 5% in the last 24 hours, trading above $20,000 and $1,100. U.S. stocks were hit harder and haven't recovered, so investors may wonder if bitcoin and other cryptocurrencies will continue tracking traditional markets or diverge.

“A day after the CPI, we have witnessed no big hemorrhage in the market and no dump in bitcoin,” says Martin Hiesboeck, head of blockchain and crypto research at Uphold.

Bitcoin is stabilizing, but "sellers are keen to test if the June lows hold," says Oanda's Edward Moya.

It remains to be seen how continuous inflation will affect bitcoin, the original and largest crypto, and the rest of the crypto industry, but short-term volatility is a safe bet.

June's inflation report and crypto investors

Surging inflation, a wobbly stock market, rising interest rates, and a looming recession have influenced the crypto market this year.

The latest inflation report shook the crypto market. Inflation touched a four-decade high in June, while forecasters expected a slowdown.

In June, May's inflation data contributed to bitcoin falling below $30,000. A similar situation occurred last week, but the largest crypto climbed back above $20,000 within a day. Bitcoin inspired other coins.

What's different now?

Some experts suggest the crypto market may be stabilizing after plunging for months, while others say investors and dealers may have already priced in substantial inflation. As long as investors are negative, the market may not move much. It's hard to say.

Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, told CoinDesk that falling inflation is a key bitcoin bottom signal. I'd be wary until inflation starts to fall because the Federal Reserve is king when it comes to risk assets like bitcoin and quantitative tightening might go for months.

What should cryptocurrency investors do?

Now could be a good moment to invest in established cryptos like bitcoin and ethereum while prices remain low. Prices may fall further.

Always explore bitcoin and other cryptocurrencies before investing. Why are you participating in this unpredictable market? With a buy-and-hold approach, price fluctuations and significant falls are normal.

Experts recommend only investing what you're willing to lose and keeping bitcoin below 5% of your portfolio, as long as it doesn't hinder your other financial goals. Always save for emergencies, pay off high-interest debt, and contribute to a traditional retirement plan before investing in crypto.

Cryptocurrency is a minor element of diverse assets like low-cost index funds for long-term wealth and retirement savings.