US Core PPI Falls 2.4%, Bitcoin and Altcoins to Soar? - Coinspeaker

Key Notes

• April PPI rose 2.4% year-over-year, a positive inflation figure below expectations.
• Core PPI fell 0.4% month-over-month, also signaling cooling inflation.
• Bitcoin price dropped over 24 hours, but it may be nearing a local bottom, a springboard for a rebound.

The financial market received fresh signs of cooling inflation in the United States on Thursday following the Producer Price Index (PPI) report. The preferred inflation gauge pointed to weaker-than-expected producer prices. The released data triggered immediate attention from traders as Bitcoin

BTC $96 611

24h volatility: 2.1%

Market cap: $1.92 T

Vol. 24h: $29.09 B

and top altcoins reacted.

US Inflation Cools Further as PPI Drops Sharply

According to X user CyclesWithBach, the US PPI for April rose 2.4% year-on-year. However, it fell short of the 2.5% forecast and down from 2.7% the previous month.

Similarly, the monthly PPI figure showed an even sharper move, falling 0.5% compared to the expected 0.2% increase. This marks the most significant drop in producer prices in recent months and adds weight to signs that inflation is steadily easing.

Core PPI, which strips out food and energy costs, came in at 3.1% year-on-year, matching estimates but down from 3.3% in March. On a monthly basis, core PPI declined 0.4%, undercutting expectations of a 0.3% rise. These numbers follow Tuesday’s release of April CPI data, which showed consumer inflation dropping to 2.3%, its lowest since early 2021.

That CPI news sparked a rally in Bitcoin, pushing it to new local highs as traders bet on the Federal Reserve easing interest rates later in the year. However, the climb was short-lived. Profit-taking quickly kicked in, dragging Bitcoin back below $102,000. The crypto market has since steadied, but the mood remains watchful.

It is worth noting that the broader macro picture also showed mixed signals. Jobless claims stood at 229,000, exactly as forecast.

Meanwhile, the Philadelphia Fed Manufacturing Index improved to -4, exceeding expectations of -11 and rebounding from -26.4 in April. Retail sales rose 0.1% month-on-month, slightly above the 0% estimate but far below March’s 1.4% jump.

Market analysts are closely watching the January US CPI report, which aligns with the released easing inflation data. They noted that a lower-than-expected inflation figure could trigger a recovery in Bitcoin and altcoins.

Crypto Markets Eye Fed and Inflation Trend

It is important to note that the total crypto market cap had climbed back above $3.38 trillion before the release of the PPI numbers, fueled by optimism around easing inflation. Despite this, Bitcoin’s price still declined.

At the time of writing, Bitcoin has dropped 1.86% over the past 24 hours and is now trading for $101,734. Altcoins like Ethereum [NC] and XRP

XRP $2.22

24h volatility: 0.8%

Market cap: $129.99 B

Vol. 24h: $2.17 B

have also dropped 3.51% and 5.94%, respectively.

This price outlook shows the cautious market mood before the data was released. It is worth noting that Bitcoin faced selling pressure before the data release.

Crypto analyst Doctor Profit noted that Bitcoin price may be approaching a local bottom, with the MVRV indicator suggesting a potential range between $68,000 and $74,000.

However, with CPI and PPI showing consistent declines, crypto investors are watching for a potential digital asset market rebound. If the lower inflation continues, cryptocurrency may benefit from looser financial conditions in the months ahead.

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