On May 15, 2025, the market received an apparently favorable economic data point, but it failed to ignite an upward sentiment for cryptocurrencies. The U.S. Producer Price Index (PPI) unexpectedly fell by 0.5% in April, far below economists' expectations of a 0.2% rise. This is the first decline in core PPI since the onset of the pandemic in 2020. However, unlike the previous narrative of 'bad news turning into good news', Bitcoin did not rebound but rather retraced its gains, falling from around $104,000 to $102,655, a drop of about 1.3%.
Meanwhile, Ethereum fell 2.2%, Solana and Avalanche dropped 1.7% and 2.1% respectively, while the top ten cryptocurrencies almost all turned green. The core behind this is not the inflation data itself, but the indecisiveness of the Federal Reserve's policy expectations, which is becoming the core driving force of the market.
PPI falling, services crashing, but why isn't the market responding?
From the data itself, this PPI report releases a very clear deflationary signal:
PPI fell by 0.5% month-on-month, the largest decline since April 2020.
Service prices fell by 0.7%, marking the largest single-month decline since 2009.
Final demand trade service profit margins have shrunk significantly, particularly with mechanical and automotive wholesale profit margins dropping by 6.1%.
This data should have served as strong support for the market betting on the Federal Reserve's interest rate cuts this year, but the market clearly did not respond positively. Nansen's chief researcher Aurélie Barthere pointed out: "Such PPI data is unlikely to become a major catalyst for the movements of risk assets like Bitcoin unless it significantly exceeds expectations."
Her view is not without reason—the market is truly focused not on 'current inflation' but on **'what the Federal Reserve really wants to do.'**
Powell's ambiguous statement: market uncertainty is the biggest risk asset.
Hours after the data was released, Federal Reserve Chairman Powell delivered a speech. He reiterated the 2% inflation target and hinted that the Federal Reserve may modify its policy consensus statement in the coming months to better respond to the complex environment.
He stated: "As complex events continue to emerge, clear communication and understanding of uncertainty will be at the core of future policy frameworks."
This statement has triggered a clear expectation disappointment of 'insufficient signals' in the crypto market: the market originally hoped Powell would release more clear wording regarding the interest rate cut rhythm, but he merely made 'mild adjustments in language'. As a result, investors immediately shifted to a defensive stance, opting to take profits or avoid high-volatility assets.
Tracy Jin, COO of MEXC exchange, also pointed out: "If Powell continues to avoid a clear response to the 'interest rate cut timetable', the market will naturally tighten its risk appetite, with altcoins being the most vulnerable to selling pressure, and BTC may also test the $97,000 support in the short term, or even retest $93,000."
The inflow of ETF funds has not brought immediate support, and the market has returned to a wait-and-see pattern.
Although expectations for interest rate cuts by the Federal Reserve have been suppressed in recent days, the ETF market has actually quietly begun positioning:
On Wednesday, 11 Bitcoin spot ETFs in the U.S. recorded a net inflow of $320 million.
Among them, BlackRock alone absorbed up to $233 million.
This capital movement indicates that institutions have not abandoned the medium-term bullish trend, but the short-term rhythm is clearly leaning towards caution. This also aligns with Mlion.ai's ETF inflow tracking data—despite the influx of funds, the short-term market sentiment index has not warmed up, indicating that large funds are choosing to wait for more cost-effective entry points.
The fear and greed index has also risen slightly from 70 to 71, remaining in a historically high range, further reinforcing the rationality of a short-term adjustment.
Although a pullback has occurred, the fundamentals have not deteriorated.
Essentially, this current pullback does not signify a trend reversal. Mlion.ai's on-chain behavior analysis module shows:
Long-term holders of BTC have not shown large-scale outflow behavior;
ETH mainnet gas fees continue to decline, indicating a reduction in speculative activity, but the network is not stagnant;
The number of trades in the Solana ecosystem remains relatively high, with TVL fluctuating slightly but structurally robust.
In addition, in the DeFi market, Bitcoin's DeFi TVL has nearly doubled to $6.216 billion over the past month. Institutional funds are also continuing to focus on the DeFi direction, with institutions like JPMorgan starting to explore the monetization capability of DeFi structures for institutional Bitcoin assets.
This means that even if there is a short-term adjustment, Bitcoin's long-term value is still supported by financial innovation, ETF mechanisms, and the continuous deepening of the on-chain ecosystem.
Key focus for the future: PCE data + policy expectation game.
In the short term, the market will face two key observation indicators:
May 30 PCE index: This is the inflation indicator that the Federal Reserve pays more attention to, more valuable for policy guidance than CPI and PPI;
Changes in rhetoric before the June FOMC meeting of the Federal Reserve: Any loosening of the policy tone may become the trigger point for the next market rally.
At the same time, a 90-day negotiation window has been reached between China and the U.S. regarding the cancellation of some tariffs, which may also become one of the pricing variables for global risk assets.
From the perspective of Mlion.ai's strategy module, it is advised that users at this stage:
Don't blindly chase the rise; wait for a more reasonable pullback support level;
Use Mlion.ai's AI strategy visualization tool to assist in determining the next key support and rebound positions for BTC and ETH;
Combine on-chain large holder behavior analysis with ETF inflow data to capture signs of institutions re-establishing positions.
Conclusion: In the period of policy ambiguity, the market needs 'patient assets'.
The current market structure is neither a bear market nor a bubble burst, but rather has entered a structural cooling period under a policy ambiguity cycle. In this environment, chasing highs can easily lead to being trapped, and panicking and exiting can also miss future opportunities.
The truly smart strategy is to use AI tools to understand trend structures and wait for the moment when value density returns.
Mlion.ai will continue to track on-chain market behavior, ETF movements, sentiment indices, and policy trends to provide users with high-frequency decision support, helping you navigate through this 'waiting period' in the fog.
Disclaimer: The above content is for information sharing only and does not constitute investment advice. Market volatility is extremely high, please make rational decisions within your risk tolerance.
