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Bitcoin fell below $70,000 amid rising U.S. inflation and the Fed’s rate pause
Bitcoin lost about 8% since the beginning of the week and dropped to $69,505 after the release on March 18 of U.S. producer inflation data, which again exceeded forecasts. The Federal Reserve kept the rate unchanged and at the same time raised its inflation outlook.
1-week chart of $BTC/USD and 200EMA. Source: Bitstamp.
Producer inflation exceeded forecasts
The U.S. Bureau of Labor Statistics released February data on the Producer Price Index (PPI): the increase was 0.7% month-over-month versus a forecast of 0.3%, and 3.4% year-over-year versus the expected 3%. This is the largest 12-month increase since February 2025. The data were released a few hours before the Federal Open Market Committee (FOMC) meeting and immediately added tension to the markets.
Trading firm QCP Capital in its analysis called this week the most important for central banks for the entire year. Analysts noted that expectations for monetary easing have sharply declined — high oil prices complicate the path to rate cuts even amid slowing growth and weakening labor market indicators. For cryptocurrencies, this means one thing: interest rates are no longer a tailwind.
Also noteworthy is the statistic cited by a market analyst under the pseudonym Sherlock: since June 2025, Bitcoin has declined after each of the previous six FOMC meetings — regardless of the final rate decision.
The Fed kept the rate unchanged, inflation forecast raised
The FOMC meeting brought no surprises: the rate remained unchanged. This decision matched market consensus — the Chicago Mercantile Exchange’s FedWatch tool estimated the probability of a pause close to 100%. However, the Fed simultaneously raised its own inflation forecast, which added caution in interpreting the meeting’s results.
The backdrop for the meeting was challenging: in addition to inflationary pressure, markets were experiencing tension due to fluctuations in oil prices, corrections in stock markets, and the geopolitical situation, including the military conflict in the Middle East.
Profit-taking puts pressure on the market
Even before the correction, blockchain data indicated increased selling by short-term holders. According to a CryptoQuant analyst, more than 48,000 $BTC in profit flowed to exchanges in a single day as the price approached $75,000. Holders were taking profits, using each bounce as an opportunity to exit.
Bitcoin is trading above the 200-week exponential moving average, which serves as a historical boundary between bull and bear markets. The key zone is currently around the $68,350 range. Previously, the asset закрепился above the 200EMA on the weekly chart, but this growth may turn out to be a false breakout.
AI opinion
The correlation between PPI releases and Bitcoin declines in 2025–2026 demonstrates a stable pattern: the market reacts more sharply to inflation surprises than to the rate decisions themselves. Another notable point is that the 200-week EMA has historically served not just as a technical support level, but as a psychological watershed for institutional market participants.
