See More

Crypto Market Tumbles as Key US Inflation Data Cools Down

2 mins
Updated by Michael Washburn
Join our Trading Community on Telegram

In Brief

  • As inflation rates in the US show signs of calming, Bitcoin and Ethereum experience a brief rally, indicating notable effects within the market.
  • Despite this, the crypto market fluctuations do not align with the economy's shift towards disinflation, resulting in a paradoxical situation.
  • The volatility spike in the crypto market follows the release of soft US Producer Price Index data, evidencing the entry into a disinflation phase.
  • promo

Recent data reveals the calming of inflation rates, with intriguing reverberations most noticeably within the crypto market. Bitcoin and Ethereum enjoyed a brief rally, only to relinquish these gains shortly after.

Strangely, this crypto market fluctuation does not mirror the United States economy’s evident shift toward a disinflation phase.

Bitcoin, Ethereum Volatility Spike After Soft PPI

In a surprising turn, the top cryptocurrencies saw a modest spike in volatility as key US inflation data displayed a cooling trend.

Bitcoin, the world’s largest cryptocurrency, saw a 0.60% rise, nudging from $30,500 to $30,683. Ethereum, its closest competitor, experienced a 0.39% jump, inching from $1,880 to $1,887. The overall crypto market followed suit, with the total market capitalization witnessing a 0.44% leap from $1.153 trillion to $1.158 trillion.

Following the price jump, a downswing ensued, erasing nearly all the gains made post the release of the Bureau of Labor Statistics’ Producer Price Index.

Bitcoin, Ethereum, and Crypto Market Cap
Bitcoin, Ethereum, and Crypto Market Cap. Source: TradingView

The spike in volatility comes as US producer prices in June registered only a minute increment. Subsequently evidencing the entrance of the economy into a disinflation phase. The annual increase in producer inflation was its smallest in nearly three years, bringing about a shift in investor sentiment.

The US Labor Department reported that the Producer Price Index for final demand nudged by a mere 0.1% in June.

The preceding month’s data was revised to reflect a 0.4% fall in the PPI, in contrast to the initially reported 0.3% dip. The year-on-year rise for June stood at 0.1%, the tiniest increase since August 2020.

June 2023 Producer Price Index PPI
PPI June 2023. Source: US Bureau of Labor Statistics

Contrary to economists’ predictions, the inflation rates appeared to be easing. This cooling of PPI June is attributed to the disappearance of supply chain bottlenecks and slowing demand for goods spurred by rising interest rates.

Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024

Trusted

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Frame-2466.jpg
Bary Rahma
Bary Rahma is a senior journalist at BeInCrypto, where she covers a broad spectrum of topics including crypto exchange-traded funds (ETFs), artificial intelligence (AI), tokenization of real-world assets (RWA), and the altcoin market. Prior to this, she was a content writer for Binance, producing in-depth research reports on cryptocurrency trends, market analysis, decentralized finance (DeFi), digital asset regulations, blockchain, initial coin offerings (ICOs), and tokenomics. Bary also...
READ FULL BIO
Sponsored
Sponsored