Crypto Market Dips for Second Day as U.S. Wholesale Inflation Cools

The cryptocurrency market dropped on Thursday despite a cooler-than-expected wholesale inflation report.

Bitcoin (BTC) fell 3% in the past 24 hours, trading around $80,000 after a volatile week. Meanwhile, Ethereum (ETH) slipped 2.5% to $1,830, XRP is flat at $2.22, and Solana (SOL) dipped 3% to $121, according to CoinGecko.

The overall cryptocurrency market dropped 3.5% to a market cap of $2.71 trillion. Total liquidations in the same period amounted to $176 million, with Bitcoin (BTC) accounting for the majority of liquidations at $63 million. This was followed by Ethereum (ETH) with $33 million, according to CoinGlass data.

“Markets were choppy yesterday after US CPI surprised on the cool side, though stocks ultimately ended in the green,” said Michael Brown, Senior Research Strategist at Pepperstone.

Brown further called the data “some much-needed good news on the inflation front, and a data slate that will please policymakers on the FOMC, especially with ‘supercore’ inflation also coming back below 4.0% year-over-year.”

PPI and CPI

Thursday's Producer Price Index (PPI) report from the Bureau of Labor Statistics signaled easing inflation pressures, with wholesale prices remaining unchanged in February after a revised 0.6% increase in January.

PPI also increased by 3.4% year-over-year, slightly lower than January’s 3.6% rise.

Similarly, the Consumer Price Index (CPI) report, released Wednesday, showed that core prices rose 3.1% in February, marking the smallest annual increase since April 2021.

As inflation shows signs of easing, crypto markets remain under pressure, with declining trading volumes and futures activity.

Crypto Volumes Decline

CoinDesk research found that trading activity on centralized exchanges saw a sharp decline, with combined spot and derivatives volumes dropping 20.6% to $7.20 trillion—the lowest level since October.

Spot trading volumes on centralized exchanges (CEXs) fell 19.9% to $2.31 trillion, while derivatives trading volumes declined 20.9% to $4.90 trillion, marking the second consecutive month of decreases for both markets. The derivatives market share slipped to 68%, indicating a spot-led sell-off in digital assets throughout February.

On the Chicago Mercantile Exchange (CME), Bitcoin futures trading volumes dropped 20.3% to $175 billion, contributing to an overall 19.9% decline in total CME crypto trading, which fell to $229 billion.

This was the first decline in five months and aligned with the drop in the BTC CME annualized basis, which fell to 4.08% — its lowest level since March 2023.