Bitcoin Fell Below $70,000 Amid Rising US Inflation and Fed Pause

Bitcoin has fallen roughly 8% since the start of the week, slipping to around $69,500 after stronger-than-expected U.S. inflation data and a cautious Federal Reserve outlook rattled markets. The move highlights how sensitive crypto remains to macroeconomic signals, especially as expectations for rate cuts continue to shift. Inflation Data and Fed Outlook Weigh on Bitcoin Fresh data from the U.S. Bureau of Labor Statistics showed that February’s producer price index (PPI) rose 0.7% month over month, far above the 0.3% forecast. On a yearly basis, PPI climbed 3.4%, also exceeding expectations. The release came just hours before the Federal Open Market Committee meeting, amplifying uncertainty across markets. The Fed ultimately kept interest rates unchanged, in line with expectations. However, it also raised its inflation forecast, signaling that price pressures may remain persistent. Market Expectations Shift According to CME’s FedWatch tool, markets had already priced in a near-100% probability that rates would remain unchanged. Still, the updated inflation outlook dampened hopes for near-term monetary easing. Analysts at QCP Capital described the current week as one of the most important for central banks this year, noting that elevated oil prices and ongoing inflation pressures complicate the path toward rate cuts. For crypto markets, this shift removes a key bullish driver. Lower interest rates tend to support risk assets like Bitcoin, and fading expectations for cuts can weaken that support. Profit-Taking Adds to Downside Pressure Beyond macro factors, on-chain data suggests that selling pressure has also increased. According to CryptoQuant, more than 48,000 BTC were realized in profit as Bitcoin approached the $75,000 level. This indicates that short-term holders used the rally to exit positions. At the same time, historical patterns point to continued volatility. A market analyst known as “Sherlock” noted that Bitcoin has declined after each of the last six FOMC meetings since mid-2025, regardless of the rate decision. Key Technical Level Comes Into Focus Bitcoin is still trading above its 200-week exponential moving average, a level widely viewed as a long-term market boundary. Currently sitting near $68,350, this zone is acting as a critical support level. While Bitcoin recently reclaimed this indicator, the latest pullback raises the risk of a false breakout. If the price fails to hold above this level, downside pressure could accelerate. Bigger Picture The latest move reinforces a growing trend: markets are reacting more strongly to inflation data than to interest rate decisions themselves. For now, Bitcoin remains caught between macro headwinds and technical support, with the next move likely to depend on whether inflation pressures begin to ease, or continue to surprise.