Bitcoin (BTC) has sharply corrected, dropping from a recent record of $123,400 to $117,400 amid unexpectedly high US Producer Price Index (PPI) data.
Bitcoin's Decline Amid Inflation Rise
The latest PPI data indicates that annual inflation is at 3.3%, well above the expected 2.5% and the prior 2.3%. This is the largest monthly rise in US PPI since June 2022. The increased prices signal persistent inflationary pressures, complicating the Federal Reserve's plans for rate cuts.
Federal Reserve Rate Cut Odds
Data from CME FedWatch shows a 90.5% probability of a 0.25% rate cut, down from 99.8% earlier in the week. This reduces investors' expectations regarding the Fed's actions following the new data.
Key Levels to Watch for Bitcoin
Technical analysis shows a double top pattern on Bitcoin's three-day chart, previously leading to corrections in early 2025. A crucial support level above $112,000 should be maintained; otherwise, a corrective trend towards $105,000 - $110,000 may emerge.
Bitcoin has faced significant declines following unexpected inflation data, which also lowered the odds of a Fed rate cut. Stability above key levels may create room for altcoin growth.
