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Bitcoin drops below $73,000 amid rising US Producer Price Index
Bitcoin (BTC) fell below $73,000 on March 18 after the US Bureau of Labor Statistics released February data for the Producer Price Index (PPI), which significantly exceeded Wall Street expectations.
Caution prevailed in the crypto market, as traders awaited the Federal Reserve (Fed) interest rate decision due later the same day.
Wholesale inflation exceeds expectations
The headline PPI rose by 0.7% month-over-month in February — more than double the consensus forecast of 0.3%. On a yearly basis, wholesale prices increased by 3.4%, above the expected 3% and marking the highest level since February 2025.
PPI comes red hot:
PPI 0.7% MoM, Exp. 0.3%
PPI Core 0.5% MoM, Exp. 0.3%PPI 3.4% YoY, Exp. 3.0%
PPI Core 3.9% YoY, Exp. 3.7%— zerohedge (@zerohedge) March 18, 2026
Core PPI (excluding volatile food and energy prices) also exceeded expectations, rising 0.5% MoM versus a 0.3% forecast, and 3.9% YoY versus 3.7% expected. Goods contributed the most, with prices increasing 1.1% over the month due to higher food and energy costs.
These figures followed a relatively calm February Consumer Price Index (CPI) report of 2.4% YoY, which briefly improved risk appetite. However, the stronger-than-expected PPI suggests that producer-level inflation pressures have not yet fully passed through to consumers and may push future CPI readings higher.
Bitcoin price dynamics. Source: TradingView
Rising PPI casts doubt on Fed easing
The timing is critical, as the two-day Federal Open Market Committee (FOMC) meeting concludes today. The Fed statement is expected at 2:00 PM ET, followed by a press conference with Fed Chair Jerome Powell at 2:30 PM ET.
According to CME FedWatch, the probability of keeping rates at 3.50%–3.75% stood at 99% ahead of the meeting.
Fed rate expectations chart. Source: CME FedWatch Tool
The strong PPI data reinforced this outlook and may reduce expectations for monetary easing in 2026.
Traders are closely watching the updated economic projections and the Fed’s dot plot. If the expected number of rate cuts in 2026 drops from one to zero, a sell-off in risk assets may intensify. Conversely, an unexpected increase to two cuts could support the market.
Fed interest rate expectations chart. Source: CME FedWatch Tool
At the time of publication, Bitcoin was trading around $72,509, after a sharp drop below the $73,000 level.
See also: "$100 oil and central bank week — QCP Capital on the current state of the Bitcoin market"
