Fresh data from the U.S. economy has reignited optimism in the crypto market. The US PPI drop in April signals cooling inflation, leading traders to expect possible interest rate cuts—news that could benefit both Bitcoin and altcoins.
Inflation Slows as Producer Prices Slide
On Thursday, new numbers from the Producer Price Index (PPI) pointed to weaker-than-expected inflation. April’s PPI rose 2.4% year-on-year, missing the 2.5% forecast and down from 2.7% in March.
Even more notably, monthly PPI dropped by 0.5%. Analysts had expected a 0.2% increase, making this the steepest decline in recent months.
Core PPI, which excludes food and energy, also came in lower. It matched yearly expectations at 3.1% but dropped 0.4% on the month—contrary to the expected 0.3% rise.
This follows the earlier CPI data, which revealed that consumer inflation dipped to 2.3%, the lowest level since early 2021.
Crypto Markets React—But Gains Are Short-Lived
Following the CPI release, Bitcoin jumped to new local highs. However, the excitement was short-lived. Traders quickly took profits, pulling BTC back below $102,000. At the time of writing, Bitcoin trades at $101,734, down 1.86% in 24 hours.
Ethereum and XRP also saw losses of 3.51% and 5.94%, respectively. Although the broader crypto market cap rose above $3.38 trillion before the PPI numbers dropped, the rally lost steam as traders remained cautious.
Mixed Macroeconomic Signals
Beyond inflation, other U.S. economic indicators sent mixed signals:
- Jobless claims came in at 229,000—right in line with forecasts.
- Philadelphia Fed Manufacturing Index improved to -4, better than the -11 expected.
- Retail sales edged up 0.1%, slightly above estimates but well below March’s 1.4% rise.
These figures highlight a fragile but improving macroeconomic picture that traders are factoring into their crypto outlook.
What’s Next for Bitcoin?
Analysts like Doctor Profit suggest Bitcoin could be nearing a local bottom. The MVRV indicator points to a potential support range between $68,000 and $74,000.
Despite the current pullback, signs of declining inflation could pave the way for a rebound in digital assets. If the trend continues and the Fed considers easing monetary policy, the crypto market could benefit from looser financial conditions in the second half of 2025.
