The US Core PPI decline signals easing inflation, sparking hopes for rate cuts that could boost Bitcoin and altcoin prices.
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.
🚨BREAKING: US MACRO DATA RELEASED!
🇺🇸 PPI (Apr), 2.4% Vs. 2.5% Est. (prev. 2.7%)
🇺🇸 Core PPI, 3.1% Vs. 3.1% Est. (prev. 3.3%)
🇺🇸 PPI (Apr) MoM, -0.5% Vs. 0.2% Est. (prev. 0.0%)
🇺🇸 Core PPI MoM, -0.4% Vs. 0.3% Est. (prev. 0.4%)
🇺🇸 Jobless Claims, 229K Vs. 229K Est. (prev.… pic.twitter.com/qnIWWVZCm3
— BACH (@CyclesWithBach) May 15, 2025
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.
#Bitcoin: If we consider no Black Swan event, then BTC is very close to its local bottom, the MVRV indicator that is very reliable in finding bottom structures shows us a very clean picture right here which aligns with my analysis of 68-74k, which would mark the local bottom pic.twitter.com/02iSRxA48g
— Doctor Profit 🇨🇭 (@DrProfitCrypto) March 13, 2025
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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