Bitcoin fell 4%, bottoming at $20,400 following news of the U.S. Producer Price Index (PPI) coming in better than expected.
December 2022’s PPI came in at 6.2% year-over-year (YoY,) less than the expected 6.8% rate. The data signaled an easing of inflationary pressure, giving scope for the Fed to slow its current pace of interest rate hikes.
The PPI measures changes in the prices paid by producers and is often taken as an indicator of upcoming consumer price data.
On the release of PPI data, Bitcoin initially moved higher, reaching $21,650 by 14:15 UTC.
However, an hour later, the leading cryptocurrency suffered a sharp sell-off that found support at $20,400. A strong bounce followed, topping out at $21,140.