US PPI Inflation Softens to 2.4%; Crypto Market to Rally?

After favourable Consumer Price Index (CPI) data earlier this week, the softer-than-expected Producer Price Index (PPI) of 2.4% on Thursday has boosted sentiments for the crypto market.

Today, the U.S. Bureau of Labor Statistics released the PPI data, and it came as a pleasant surprise for the market. Following the release, Bitcoin prices rallied 1% and are trading close to $103K.

The US CPI dropped to 2.3% in April, indicating a cooling of inflation in the US economy.

As the data was confirmed on Tuesday, Bitcoin rallied to fresh highs, promising an all-time high soon. However, as profit-taking posed resistance, BTC prices have now dropped gradually to below $102K.

Today, the US PPI data showed that the final demand in the US rose 2.4% year-on-year in April. The Producer Price Index for final demand fell 0.5 percent in April.

Prices for final demand services decreased 0.7 percent, as per the Labor Department.

Last month, the index had advanced by 2.7 percent year-on-year, and a drop this month demonstrates sustained deceleration for inflation in the US.

The US PPI tracks the wholesale-level price pressures and offers clues on whether inflation is truly cooling or merely shifting upstream. Consensus forecasts pegged the US PPI at 2.5-2.7 percent annual gain in April.

While the market has already factored in the consensus forecasts, the below-expectation inflation figures are likely to trigger a rally in the crypto market.

The markets remained tense ahead of the data release today, with BTC prices dropping 1.7% over the last 24 hours till today morning.

The total crypto market cap has already rallied back above $3.38 trillion on optimism ahead of the data.

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