The day started strong – Bitcoin set a new all-time high above $124,400 early morning, with Ethereum also approaching $4,800 and BNB registering a fresh high. The rally continued a strong week across crypto markets, driven by momentum from earlier CPI data and rising ETF inflows.
However, the trend reversed sharply after the release of hotter-than-expected U.S. Producer Price Index (PPI) data, which showed a 0.9% monthly increase in July – well above forecasts of 0.2%. Core PPI, excluding food, energy, and trade services, rose 0.6% on the month.
Markets React to PPI Surprise
The PPI report triggered a broad sell-off in risk assets. Bitcoin dropped to around $118,000, down roughly 2% on the day. Ethereum pulled back below $4,600, and XRP fell by more than 5%, to just above $3. Liquidations across crypto derivatives surpassed $1 billion in the 24 hours surrounding the announcement.
The inflation data lowered expectations for a September interest rate cut from the Federal Reserve, despite earlier market positioning suggesting near-certainty of easing.
Clarification on U.S. Bitcoin Reserve Policy
Also today, Treasury Secretary Scott Bessent confirmed that the U.S. government does not plan to buy additional Bitcoin for its strategic reserve. The reserve will only grow through confiscated assets. While this statement caused some market reaction, the policy had already been outlined earlier this year and did not represent a change in direction.
Crypto Still Strong Over the Week
Despite today’s drop, weekly and monthly charts remain positive for major cryptocurrencies. Bitcoin and BNB both reached new all-time highs within the past 24 hours, and several large-cap assets remain within single-digit percentage points of their record levels.
Attention now shifts to Friday’s scheduled meeting between President Donald Trump and Russian President Vladimir Putin, where discussions will center on the ongoing conflict in Ukraine. Market volatility is possible depending on the outcome.
