Crypto Markets Reel as Hot PPI Fuels Fed Policy Uncertainty

Crypto derivatives faced $1 billion in liquidations following a higher-than-anticipated PPI report, which sent Bitcoin down 2%+ and revived concerns about the Fed’s rate-cut timeline.

The 0.9% MoM and 3.3% YoY PPI surge—the strongest annual gain since February—caught markets off guard, as economists had expected just 2.5% YoY. The reaction was swift: $782M in longs were wiped out, including a $6.25M ETH/USDT liquidation on Bybit.

Interestingly, rate-cut expectations barely budged, with 92% odds still priced in for September. This suggests traders are waiting for CPI data before reassessing whether inflation is reaccelerating—a critical factor for crypto’s near-term trajectory.