Bitcoin climbed past $114,000 this week, pushing markets higher after a surprisingly weak reading on producer prices. According to reports, the move followed a pullback in US PPI that many traders read as a sign the Federal Reserve may be able to start cutting rates. Related Reading: Institutional Adoption Rises: 21X Brings Chainlink Into Europe’s Tokenized Securities Market The jump was quick and loud on price charts. It caught the attention of both retail traders and bigger money. Cooling Inflation Spurs Rate Cut Bets According to published data, US Producer Price Index (PPI) fell to about 2.6% year-on-year, while core PPI — which strips out food and energy — came in near 2.8%. On a monthly basis, PPI showed a drop, one of the first such moves since March 2024. Based on reports, those weaker numbers fed hopes that the Fed could ease policy sooner rather than later, and markets reacted accordingly. Bitcoin’s Rally And Broader Crypto Moves Bitcoin hit roughly $113,850 on some exchanges before trading above $114,000, and Ethereum climbed past $4,400 as part of the same upswing. Reports have disclosed that institutional flows and stablecoin liquidity helped lift prices, and that investor positioning shifted toward risk assets after the data. Traders were watching support around $112,500-$113,000 and resistance near $115,000-$115,500 as the session progressed. Momentum was strong, but some caution remained. Bitcoin’s Technical Levels And Flows Market technicians pointed to clear levels. If support near $112,500 breaks, it could open the way to a short pullback. If $115,500 is cleared, buyers may push for higher ranges. At the same time, some on-chain indicators showed rising transfers into exchanges, a sign that profit taking could be ahead. Reports have disclosed that both demand and supply signals will be watched closely by desks and algorithmic funds. What Could Slow This Move While PPI cooled, other data could change the picture. Consumer inflation and jobs figures are still to be watched, and those reports can keep the Fed on guard. Rate cuts are now being priced in by some traders, perhaps as soon as September, but that outcome is not guaranteed. If consumer prices re-accelerate or job strength stays high, easing could be delayed and markets may retrace gains. Related Reading: Tighter Premiums Put Crypto Treasuries On Risky Road, According To NYDIG What Investors Should Watch Next According to market commentators, the key near-term items are the upcoming CPI release, monthly jobs data, and Fed commentary. Also important are flows into spot products and the dollar’s direction — a firmer dollar would likely pressure risky assets. Traders will also keep an eye on how quickly liquidity moves from stablecoins into BTC and ETH, and whether profit-taking appears at the big technical thresholds already mentioned. Featured image from Meta, chart from TradingView
Traders boosted bets that the Fed would cut rates by 50 basis points next week, but bitcoin bulls have plenty of reason for caution.
Inflation at wholesale level in the U.S. in July sped up far beyond economist forecasts, calling into question expectations for lower interest rates.
Futures still imply high odds of a Fed rate cut, even after a surprisingly high inflation reading preceding $1 billion in crypto liquidations.
Under pressure this morning ahead of a coming Trump tariff announcement, the price of bitcoin didn't immediately react to the data.