I wonder how macro data can change sentiment in the crypto market within a few hours. I saw that Bitcoin dropped over 2% after the release of the February PPI data — it broke below 66K, losing what it gained the day before at 70K. Ethereum and other altcoins moved in a similar direction. It was quite sudden.

It turned out that producers are paying more for goods and services than expected. The producer price index rose by 0.5% instead of the forecasted 0.4%. Although annual inflation on paper decreased to 2.9% from 3%, it was still higher than analysts anticipated. Worse, core annual inflation increased to 3.6%, the highest in ten months. That was enough for the Fed to delay plans for rate cuts.

The stock market reacted similarly — the Dow Jones lost nearly 1.5%, and tech stocks fell by almost a percent. When annual inflation remains stubborn, investors pull out of riskier assets. Bitcoin still hasn't stabilized after the October peak above 126K, so it’s once again under pressure.

Interestingly, food and energy prices actually fell, but wholesalers and retailers increased margins on clothing, cosmetics, and telecommunications. It looks like companies are passing costs further down the chain. That’s why annual inflation remains a problem, despite some categories weakening.

For now, Bitcoin is stuck in uncertainty. Some experts say that if lawmakers prepare clear rules for crypto by mid-year, it could change the game. But for now, the market is waiting and watching whether the Fed will keep rates higher for longer than expected.