U.S. July PPI Surprises to the Upside — Crypto Rally Stalls as Rate Cut Doubts Emerge

TradingKey – On Friday, August 15, hotter-than-expected U.S. Producer Price Index (PPI) data triggered a broad pullback in the crypto market, dampening hopes for a September Fed rate cut. 

Bitcoin (BTC) dropped more than 3%, falling below $120,000, while Ethereum (ETH) slipped nearly 3% to $4,619. Ripple (XRP) fell over 5% to $3.11, and altcoins like CRV, WIF, WLD, GALA, and BONK plunged more than 10%.

Top 5 Crypto Price Changes – Source: CoinMarketCap

PPI Data Sparks Inflation Concerns

The U.S. Bureau of Labor Statistics (BLS) reported that:

• July PPI (MoM) rose 0.9%, vs. 0.2% expected
• PPI (YoY) climbed 3.3%, vs. 2.5% forecast
• Core PPI (MoM) surged 0.9%, also beating the 0.2% estimate

These figures reignited inflation fears and cast doubt on the Federal Reserve’s willingness to cut rates next month. According to CME FedWatch, the probability of a 25-basis-point rate cut in September dropped from 94.3% to 92.1%, while the chance of no change rose from 0% to 7.9%.

Bitcoin Faces Key Support at $110,000

With rate cut expectations now in flux, crypto assets may struggle to regain momentum. Analysts warn that Bitcoin could retest the $110,000 support zone, which held firm during early August despite heavy selling pressure. A break below this level could trigger further downside, especially if macro conditions deteriorate.

Bitcoin Price Chart – Source: TradingView