US PPI Data Surpasses Expectations, Bitcoin Faces Downside Risk

Recent data released by the U.S. showed that the Producer Price Index (PPI) for January significantly exceeded expectations. The month-over-month PPI rose by 0.5%, surpassing the anticipated 0.3%. Core PPI also saw a stronger-than-expected increase of 0.8% month-over-month, compared to a projected 0.3%.

This unexpected inflation data has placed downward pressure on Bitcoin, which experienced a drop of nearly 3% in intraday trading. The cryptocurrency is currently trading around $66,178. Market sentiment has shifted, with expectations for a Federal Reserve interest rate cut in March now falling below 4%.

In contrast, traditional safe-haven assets have shown robust performance. Gold prices surged past $5,200 per ounce, reaching a new high since late January. Silver also recovered, trading at $92, its highest level since January 30.

Traders and analysts are cautioning that Bitcoin could follow a similar trajectory to last month, when BTC/USD briefly fell to a 15-month low of $59,000.

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