Important report comes out that inflation is pretty bad (USD)..
Bitcoin dumps off a cliff..
This is the exact opposite of what Bitcoin is supposed to do..
Has Bitcoin strayed too far from its purpose?
I don't think anyone strays too far from Bitcoin. Because Inflation is a decrease in purchasing power in all sectors of the economy and also the market. So what is happening to Bitcoin at this time is a natural thing and is not deviant because people are not able to make purchases gradually when inflation occurs.
Bitcoin crashes are a common occurrence, but if it is accompanied by inflation, then it is very visible as if Bitcoin is not doing what it should be doing. Though it is a natural thing and also very simple to interpret at this time.