by Enoch Mwathwa
The recent inflation figures in the United States have shaken markets worldwide, including the cryptocurrency industry. Bitcoin, which has been trading close to record levels, fell immediately as traders responded to the surprise numbers. The above-expected Producer Price Index (PPI) has raised concerns of postponement of the reduction in interest rates by the Federal Reserve. This abrupt switch of feelings has made the investors doubt whether the recent high rise of Bitcoin can be maintained in the short term.
U.S. PPI at 3.3% Sparks BTC Price Decline
The U.S. Producer Price Index (PPI) rose to 3.3% year-on-year in July. Data from the U.S. Bureau of Labor Statistics confirmed the rise. This increase was above the expected 2.5% figure. The monthly PPI rose by 0.9%, the largest increase since June 2022.
Core PPI also rose by 0.9% month-on-month and 3.7% year-on-year. Analyst forecasts had expected only 0.2% monthly and 2.9% annual growth. The data release caused Bitcoin to fall sharply below the $120,000 level. At press time, BTC traded near $118,000 after the drop.
Market Reaction to Inflation Data and BTC Price Movement
Data on TradingView revealed that Bitcoin had been moving relatively between $120,000 and before the report. A large number of traders anticipated the PPI to be in agreement with the recent stability in the Consumer Price Index (CPI). The recent CPI statistics indicated stable inflation in the economy at a rate of 2.7%, causing optimism. Expectations for a 25-basis-point rate cut in September had reached 99%.
The new PPI data has led to uncertainty about the Federal Reserve’s next move. Analysts say the Fed may now pause before cutting rates. Higher rates generally reduce demand for risk assets like cryptocurrencies. Investors may move funds to safer investments if rates remain high.
Liquidations Surge Following Bitcoin Price Drop
Data from Coinglass showed a sharp increase in crypto liquidations. More than $562 million in positions were liquidated in the past hour. Long positions accounted for $537 million of the total. Short positions accounted for just $27 million.
This marks a reversal from the previous day’s trading activity. Yesterday, Bitcoin rallied to a new all-time high. Despite the current decline, CME FedWatch data shows a 94.4% chance of a rate cut. Analysts will continue to monitor inflation data and policy changes.
Inflation came in hot but
CME FedWatch Tool shows no change in September rate cut expectations
Markets still price in a 94.5% chance of a 25 bps cut.#Fed #InterestRates #Inflation #Stocks #Dollar #Bitcoin #Gold pic.twitter.com/zD0UWJoXsd
— Bull.BnB Trades & News (@Bull_BnB_Trades) August 14, 2025
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