Soft PPI Crushes Fed Hike Bets, BTC Blasts Past $65K

US producer inflation just cratered, gutting July Fed hike odds and sending crypto markets into a frenzy. The 0.3% monthly PPI drop, the sharpest since April 2025, combined with earlier soft CPI data, has decisively shifted expectations against further Federal Reserve tightening this month. Traders are now betting on an 87.7% chance the Fed holds rates steady.

Headline PPI landed at 5.5% year-over-year, significantly below the 6.2% consensus. Core PPI also eased to 4.7% against a 5.2% forecast. This wholesale pressure retreat across the supply chain reinforces the disinflation trend, providing a clear signal to the market.

The immediate fallout: Bitcoin reclaimed $65,000, Ethereum topped $1,900, and nearly $100 million in crypto shorts were liquidated within 30 minutes. This short squeeze mirrors earlier rallies fueled by weak economic data, proving that macro shifts remain the primary catalyst for market moves.

However, this relief could be fragile. Gasoline prices drove much of June’s decline, but oil has pushed above $85 after President Trump announced a Strait of Hormuz blockade. A hotter energy print next month could quickly derail the disinflation story and cap further gains.

For now, $BTC faces its next test at the $66,000 resistance zone, which has capped price action since mid-June. The market is riding a wave of macro optimism, but geopolitical energy shocks could quickly flip the script.