The cryptocurrency was buoyed by an unexpected drop in wholesale inflation for the month of August as published by the Bureau of Labor Statistics.
Bitcoin Hits $114K as Inflation Cools
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BTC Breaches $114,000 After PPI Report
Economists were caught off guard on Wednesday morning when the Bureau of Labor Statistics (BLS) announced a 0.1% drop in the August Producer Price Index (PPI), which measures U.S. wholesale inflation. Experts had predicted a 0.3% increase after July saw the PPI climb by 0.7% despite a downward revision. Bitcoin soared to $114K on the news after days of treading water in the $110K range.
The primary driver for August’s lower inflation came from cheaper machinery and lower vehicle wholesale prices. “Three quarters of the August decrease in prices for final demand services can be attributed to a 3.9% decline in margins for machinery and vehicle wholesaling,” according to Wednesday’s announcement.
The PPI is widely considered a leading indicator to its counterpart, the Consumer Price Index (CPI), which calculates inflation for retail customers. The BLS will publish its CPI report on Thursday, but for now, both stocks and bitcoin are enjoying upward momentum from the mostly positive PPI data. The overall index now stands at an annualized rate of 2.6%, and when the volatile categories of food, energy, and trade services are removed, the adjusted PPI for August is 2.8%.
“Just out: No Inflation!!!” President Donald Trump wrote on Truth Social. “‘Too Late’ must lower the RATE, BIG, right now. Powell is a total disaster, who doesn’t have a clue!!! President DJT.”
Overview of Market Metrics
Bitcoin was trading at $113,877.77 at the time of writing, up 2.7% for the day according to Coinmarketcap. The cryptocurrency has traded between $110,776.70 and $114,275.25 in the last 24 hours.
Trading volume was up 15.65% since Tuesday and stood at $53.04 billion at the time of writing. Market capitalization climbed to $2.26 trillion, a 2.67% jump, in line with today’s price increase. Bitcoin dominance edged up slightly by 0.10% since yesterday, reaching 58.23%.
Total open interest for bitcoin futures jumped to $84.86 billion, a 3.87% increase over 24 hours, according to Coinglass. Bitcoin liquidations dropped to $37.96 million for the day, with short sellers dominating most of those losses at $34.96 million. The remaining $3 million consisted of long liquidations.
