Bitcoin falls as PPI data and jobless claims hit markets:
Bitcoin recently touched a record high above $124,000, saw a sharp drop below $119,000 after fresh economic data was released. Ether (ETH) also fell nearly 4% to around $4,550, while other popular altcoins like Solana experienced similar losses. This sudden pullback has caught the attention of traders following the latest crypto news.
The main trigger behind the market drop was the latest Producer Price Index (PPI) report, which showed stronger-than-expected results. PPI measures the average change in selling prices received by domestic producers and is often used as an early sign of inflation. A higher PPI means costs are rising for businesses, which can eventually affect consumers. For crypto investors, higher inflation risks often mean uncertainty about interest rates and liquidity.
Alongside the PPI release, new labor market data showed initial jobless claims for the week ending August 9 came in at 224,000, slightly below the 228,000 that analysts expected. Continuing claims stayed at 1.95 million. This data suggests the job market remains tight, giving the U.S. Federal Reserve more reason to keep interest rates higher for longer to control inflation.
According to the CME FedWatch tool, the chances of a September interest rate cut, which had been at 100%, fell to 96% after the new data was published. While this is a small drop, it signals that traders are adjusting their expectations. For the crypto market, a delay in rate cuts can slow down investment inflows, making assets like Bitcoin and Ethereum more vulnerable to price swings.
Traditional markets also reacted to the PPI report. U.S. stock index futures dropped 0.5%, the dollar strengthened, and the 10-year U.S. Treasury yield rose by five basis points to 4.25%. A stronger dollar and rising bond yields can put extra pressure on risk assets, including cryptocurrencies, as investors move toward safer investments.
The combination of hotter PPI data and a resilient labor market has led to renewed uncertainty in both traditional and crypto markets. With the Federal Reserve possibly keeping interest rates elevated for longer, traders will be watching the next inflation and employment reports closely. For now, this crypto news shows how closely digital assets are tied to wider economic trends, making global market data just as important for Bitcoin traders as blockchain developments.
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