Thursday’s hot Producer Price Index has significantly worsened the macroeconomic outlook for the crypto market, fueling concerns of a major crash
The Bitcoin price fell to $95,300 following the bad PPI data release and has continued its choppy price action since.
However, several analysts now believe that the worst is over for crypto, despite the murky global economic picture. Indeed, altcoins like XRP, Dogecoin and Hyperliquid are seeing strong rallies on Friday while low-cap meme coins are also in high demand.
Hot PPI Print Comes Out Even Worse Than The CPI — Is A Crypto Crash Imminent?
The Producer Price Index for January rose 3.5% year-over-year, exceeding the 3.3% forecast. Core PPI inflation also topped expectations, coming in at 3.6% vs. 3.3%. Crucially, the PPI is now at its hottest level since February 2023.
The disappointing PPI follows a hotter-than-expected CPI report on Wednesday, signaling that the US Federal Reserve is far from achieving its 2% inflation target.
Following the persistent inflation reports, bettors on Kalshi are placing a 20%+ chance on further rate hikes in 2025. While extremely unlikely, the odds do suggest the fearful market sentiment that is dragging down risk assets.
As per the CME FedWatch, the 30-Day Fed Funds futures are now expecting just one more rate cut in 2025, likely in October or December.
However, analysts aren’t overly concerned regarding the hot inflation reports.
For starters, Truflation, the real-time inflation data platform, estimates the current inflation rate in the US economy at 2.07%—significantly lower than the levels indicated by the CPI and PPI reports, and very close to the Fed’s target.
More importantly, the US Fed depends largely on the core Personal Consumption Expenditure (PCE) to gauge inflation levels. PPI’s components that contribute to the PCE actually cooled down in January in comparison to December.
Furthermore, US President Donald Trump has kicked the can down the road regarding reciprocal tariffs. While Trump remains committed to a trade war with several key partners, he has yet to set a start date, providing short-term relief to the markets and time for potential deals between nations.
Finally, while it’s unlikely that the US Fed will start its quantitative easing any time soon, measures like the Trasure General Account drawdown, RRP intervention, private credit creation, etc. could result in global liquidity surging, paving the way for a parabolic crypto rally.
It is, therefore, no surprise that legendary trader Bluntz believes the US Dollar Index has topped out for the next 1-2 years.
If BTC continues to hold above the key $95,500 and $91,200 support levels, the crypto market could see a broad-based rally to new highs instead of the currently feared crypto crash.
XRP, Dogecoin And New Meme Coins Rally
Despite the hot PPI print on Thursday, the Bitcoin price is currently trading at $97,000, while the altcoins are showing significant strength.
For instance, the XRP price has rallied by nearly 12% and could see a continuation to $3.
Dogecoin is also up on Friday and appears poised for the next bullish wave. Bluntz signals the formation of an Adam-and-Eve structure which could result in a push towards new all-time highs.
Meanwhile, new meme coins and low-cap assets continue to be in high demand considering they remain immune to the broader market outlook.
A new meme coin, BTC Bull (BTCBULL), has caught the attention of low-cap traders and has raised over $1.3 million in its ICO in just two days.
Despite being a meme coin, BTC Bull is tied to the Bitcoin price. Token holders will receive free BTC as an airdrop whenever the Bitcoin price hits certain set milestones. Besides, they will also benefit from regular token burn events, staking rewards and BTCBULL airdrops.
Prominent crypto influencers are bullish on the meme coin’s upside potential, with many eyeing anywhere between 10x and 100x returns.
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Source: https://en.cryptonomist.ch/2025/02/14/is-a-major-crypto-crash-imminent-ppi-inflation-come-out-even-worse-than-cpi/