bitcoin pumped to $113,700 after surprise inflation drop – fed rate cuts back on the table

producer price index just came in way softer than expected and crypto markets immediately reacted. ppi dropped 0.1% when analysts predicted a 0.3% increase. that's a massive miss that changes everything for the fed's next move.

bitcoin shot above $113,700 with over 1% gains while solana absolutely ripped 3.3% to $224. the market is clearly pricing in easier monetary policy after this data.

here's why this matters – year over year ppi came in at 2.6% vs expectations of 3.3%. core ppi was even better at 2.8% vs 3.5% forecasts. this completely reverses last month's inflation scare that had everyone worried about persistent price pressures.

caleb franzen from cubic analytics nailed it: "that's exactly the ppi data we should cheer for, assuming that it will help to suppress cpi inflation, end the recent streak of re-inflation, and allow the fed to focus explicitly on recent labor market weakness."

the fed meeting is coming up and market odds for a 25 basis point cut just went way up. some are even talking about 50 basis points now. when central banks pivot dovish, bitcoin historically does well as liquidity floods into risk assets.

what's interesting is gold also pumped on the same news, showing traditional safe havens are pricing in monetary easing too. this isn't just crypto euphoria, it's a broader macro shift.

obviously bitcoin doesn't always follow the script and we've seen plenty of sell-the-news events lately. but the setup feels different this time with inflation actually cooling instead of just hoping it would.

thoughts on this move? sustainable rally or another fake out?