Two inflation prints in two days. That is why the crypto market is down today.
Tuesday, April CPI came in at 3.8%, its highest reading since May 2023. This morning, April PPI landed at 6% annually against a forecast of 4.9%. Core PPI hit 5.2% against a 4.3% estimate. Back to back, the two reports buried whatever was left of rate cut hopes and pushed Fed rate hike odds to roughly 30% by year end.
Bitcoin is at $79,726. Down from $82,000 four days ago. The chart said this before the data did.
The Macro Catalyst
The market was already pricing something in before CPI dropped Tuesday. Bitcoin had drifted from $82,000 to $80,600 before the report hit. That was not coincidence. Institutional money does not wait for the number.
Then CPI confirmed it at 3.8%. We wrote Tuesday that inflation had spread beyond energy into shelter, apparel, and airfares, and that the energy-driven excuse for the move was not holding up under the data. Core at 2.8% does not move because of gasoline.
Today’s PPI settled the argument. 6% annually on producer prices, core at 5.2%, services inflation at 1.2% monthly. Producer prices feed into consumer prices three to six months later. The inflation pipeline is not clearing. It is filling up.
Higher producer prices mean higher consumer prices by summer. Higher consumer prices mean the Fed cannot cut. A Fed that cannot cut, and may need to hike, is not the environment where risk assets find new highs.
Bitcoin felt both prints. The market is now sitting with two consecutive inflation shockers and no clear policy relief in sight.
What the Chart Shows
Bitcoin / TetherUS Perpetual Contract 1D chart showing the $82,000 rejection on May 9 and the drop to $79,735 following the PPI release on May 13. RSI at 56 – Source: TradingView
The $82,000 level is not random. It is the 200-day exponential moving average, the same trendline that has capped every rally since the January peak above $100,000. Bitcoin tested it three times and got rejected three times. The wall is established.
RSI on the 1H chart hit 20 on the PPI release this morning, deeply oversold territory. It has recovered to 32.47 as of now. The flush appears to be in. That does not mean the bottom is in. It means the sellers who were going to sell on the inflation data have sold.
The volume divergence tells the same story it has been telling since February. The recovery from $63,000 came on declining volume. Each higher price printed on less conviction than the last. When the macro catalyst arrived, there was nothing underneath to absorb it.
What to Watch Now
Three things matter from here.
$79,500 is the line. That is the floor that has held through every major sell-off since early May. A daily close below $79,500 opens the $78,000 to $78,500 range. A sustained break below that puts $75,000 in the conversation. Bitcoin is at $79,726 right now. The margin is thin.
The CLARITY Act markup is Thursday. The Senate Banking Committee votes on stablecoin legislation at 10:30 a.m. tomorrow. Banks spent Mother’s Day lobbying to kill the yield provisions. A clean markup that advances the bill is the one remaining near-term positive catalyst for crypto. If it stalls, the market loses its last legislative tailwind and sits with two bad inflation prints and no policy relief.
Kevin Warsh takes over the Fed on May 15. He inherits a 3.8% CPI print, a 6% PPI print, and rate hike odds climbing. He has publicly advocated for lower rates. That position is now very difficult to defend. His first public statement as chair will move markets. Watch for it Friday.
Is This a Crash or a Flush?
Neither yet. Bitcoin is still above $79,500. The structural case is not broken. ETF demand has been consistent. The CLARITY Act still has a path. Warsh is not Powell and the market has not fully priced what that means yet.
What today is: a macro-driven test of the floor after a technically weak rally got hit by two consecutive data shocks. That happens. The question the chart is asking right now is whether $79,500 holds or whether this becomes something larger.
Above $79,500 the structure survives. A close above $82,000 changes everything. Below $79,500 the next stop is a conversation the bulls are not ready for.
The CLARITY Act votes tomorrow. That is the next data point that matters.
