Bitcoin News Today: July PPI Surges 0.9% Hurdles Fed Rate Cut Hopes Crypto Pulls Back 4.2% on Bitcoin Sell-Off

U.S. inflation continues to complicate the Federal Reserve's path toward rate cuts, with producer prices surging 0.9% in July—the largest monthly increase in more than three years. The core PPI mirrored that rise, casting doubt on the likelihood of a September rate reduction and triggering a pullback in crypto markets as traders recalibrated expectations [1].

Bitcoin and Ethereum, both of which had recently hit key highs, retreated under renewed macroeconomic uncertainty. According to CoinGecko, Bitcoin fell 4.2% to $118,200, while Ethereum declined 3% to $4,570 [1]. The selloff reflects a broader shift in risk appetite as market participants reassess the timing and magnitude of central bank action.

Kraken’s global economist, Thomas Perfumo, noted that while the PPI shock has dented near-term optimism, the structural appeal of crypto assets—particularly those with fixed or programmable supply—remains intact. He highlighted Bitcoin's capped supply of 21 million coins as a key factor that positions it to preserve value amid inflationary pressures [1].

Jamie Coutts, chief crypto analyst at Real Vision, observed that the macroeconomic landscape is diverging from historical norms, with inflation proving more resilient and central banks exploring unconventional measures like targeted Treasury issuance and yield-curve control. While he expects a seasonal correction in September—citing CoinGlass data showing a median 4.35% drop in six of the past 10 Septembers—Coutts also anticipates a potential fourth-quarter rebound driven by rising global liquidity [1].

He pointed to Chinese stimulus efforts and a weakening U.S. dollar as key factors that could drive a late-year rally, echoing patterns seen during the 2020–2021 market upswing. According to Coutts, liquidity trends closely align with risk-asset performance, suggesting that crypto could reaccelerate as central bank policies and global capital flows evolve [1].

Despite the near-term volatility, the PPI data has not completely derailed bullish sentiment. If liquidity conditions remain supportive and the U.S. dollar continues to weaken, the current market lull may give way to renewed momentum in the final months of the year [1].

Source: [1] Hot Inflation Clouds Fed Path, But Crypto Bulls Eye Q4 Liquidity Surge (https://decrypt.co/335383/hot-inflation-clouds-fed-path-but-crypto-bulls-eye-q4-liquidity-surge)