The latest US Producer Price Index (PPI) jumped to 6% year-over-year, sharply exceeding the expected 4.8%. Core PPI also surprised at 5.2%, well above forecasts. The data immediately pressured risk assets, with Bitcoin slipping to around $79,660.
US PPI Surges to 6%, Beating Expectations
The Bureau of Labor Statistics released the May PPI figures, which became the week's macro highlight. While markets had priced in a 4.8% annual increase, the actual reading came in at 6%. Excluding food and energy, core PPI stood at 5.2%, nearly a full percentage point higher than predicted. Persistent inflation above consensus is reigniting concerns that the Fed may maintain a tighter stance.
Upward Revision Adds to Inflation Worries
Official statements revealed that April PPI data was revised upward from an initial 4% to 4.3%. This adjustment, previously masked by hopes for stability in the Middle East and normalized oil prices, now exposes the true scale of inflation. Analysts argue that mounting price pressures are directly weighing on Bitcoin, the bellwether of the crypto market.
Brandt Warns of Downward Channel and Key Support
Technical analyst Peter Brandt noted in his latest report that Bitcoin has been trading within a descending channel since February and was recently rejected at the upper boundary. Brandt stressed that aside from brief liquidity injections, inflation concerns have not yet been fully priced in. He cautioned that if Bitcoin closes any day below $79,145, as indicated by the Average True Range (ATR) indicator, it would signal buyer capitulation. In that scenario, Bitcoin is likely to first fall toward the middle of the channel and then potentially lower.
$79,145: A Critical Line for Bulls and Bears
Brandt described current price action as driven by short-term speculative liquidity rather than solid technical or fundamental anchors. Despite persistent optimism in broader markets, weakness is emerging in the risk-on crypto sector. With less than three weeks until June, global oil inventories are reportedly approaching critical levels, adding to uncertainty. Together, these factors fuel fears that Bitcoin has not yet found a definitive bottom and that a prolonged correction may lie ahead.
Brandt emphasized that the battle will center on the $79,145 support level. A break below that opens the door to further downside. The search for a sustainable bottom continues, and investors should brace for heightened volatility.