Bitcoin holds below $70k on disappointing inflation reads this week
Stocks and cryptocurrencies have been on the decline since Thursday, although analysts say this week’s bad economic reads should have caused a bigger selloff
mrcatmint/Shutterstock modified by Blockworks
Cryptocurrencies and equities slid Friday, erasing gains from earlier this week as traders digested yet another hotter-than-expected inflation gauge.
Bitcoin and ether extended a decline that started Thursday morning.
Bitcoin (BTC) was trading 6% lower, continuing to hover below $70,000, at time of publication, according to Coinbase. Ether (ETH) was also on the decline, losing about 7% in 24 hours to trade around $3,700.
“The cumulative effect of the week’s bad news on inflation jolted BTC out of its confident climb,” Noelle Acheson, author of the Crypto is Macro Now newsletter, said. “Yesterday’s reminder of the gravity of the rates expectations adjustment understandably did more damage, pushing BTC back below $69,000, with the continued hit to sentiment continuing today.”
Read more: What banking sector uncertainty could mean for crypto markets
The S&P 500 and Nasdaq Composite indexes also slipped early in Friday’s trading session, losing 0.6% and 1%, respectively. Equities have largely pared gains made earlier in the week, although analysts say given recent economic data, the decline is not as significant as expected.
“Economic data this week has not been positive for stocks and while it hasn’t invalidated any of that bullish mantra, it has weakened it,” Tom Essaye, founder of Sevens Report Research, said.
According to data released Thursday, the producer price index (PPI), which measures selling prices for domestic manufacturers, showed a 0.6% month-over-month increase in February. Economists had expected a 0.3% monthly rise.
Core PPI for February rose by 0.3% month-over-month, higher than the 0.2% expected but less than the January read of 0.5%.
Read more: A fifth of US voters have bought crypto, Paradigm survey finds
The figures were not positive for those hoping for rate cuts in the coming months — markets are now calling for a 91% chance that the Federal Reserve holds rates through May, according to data from CME Group.
The Fed will release its rate decision and updated economic projections next week after the conclusion of the Federal Open Market Committee meeting on Wednesday.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your morning with the top news and analysis to inform your day in crypto.
- Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
- 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
- Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
- The Drop: For crypto collectors and traders, covering apps, games, memes and more.
- Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
