Bitcoin Retraces As US PPI Soars To 6.5% Ahead FOMC Meeting

Bitcoin fell hard on Thursday following some new U.S. inflation data that surpassed Wall Street estimates. The rise in inflation suggests that the Federal Reserve may keep a hawkish policy stance in the future.

Bitcoin Tumbles As US PPI Inflation Hits Record High

The Producer Price Index (PPI) rose 1.1% in May, according to data from the U.S. Bureau of Labor Statistics. It is much higher compared to a 0.6% monthly gain forecast by Wall Street analysts.

Moreover, U.S. inflation rose 6.5% year-over-year, exceeding the 6.4% expectations of analysts. It was also far higher than the previous rate of 6.0% and marked the highest level since November 2022. The Core PPI, which excludes volatile food and energy costs, also increased by 0.8%. It was also hotter compared to the estimates of a 0.4% rise.

The robust inflation data sent risk assets on a roller coaster ride with cryptocurrencies being no exception. Shortly after the data release, Bitcoin returned to the $62,500 level after earlier surging above $63,000.

This BTC price drop also created a red candle on the 15-minute timeframe chart. It indicated high short-term selling pressure for Bitcoin in response to the inflation shock ahead of the June 16-17 FOMC meeting.

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