On Wednesday morning, economists are surprised with the announcement of a 0.1% decline in the August Producer Price Index, a key indicator of U.S. wholesale inflation. Analysts had forecasted a 0.3% rise following July’s PPI surge of 0.7%, even with a downward adjustment in the figures. Bitcoin surged to $114K following the announcement, after several days of hovering around the $110K mark. August’s lower inflation was primarily driven by a decrease in machinery costs and a drop in wholesale vehicle prices.
“Three quarters of the August decrease in prices for final demand services can be attributed to a 3.9% decline in margins for machinery and vehicle wholesaling,” according to Wednesday’s announcement. The Producer Price Index is often viewed as a precursor to the Consumer Price Index, which measures inflation for end consumers. Currently, both stocks and bitcoin are experiencing upward momentum fueled by the largely favorable PPI data. The overall index currently registers an annualized rate of 2.6%. When excluding the more volatile categories of food, energy, and trade services, the adjusted PPI for August is noted at 2.8%. Bitcoin was trading at $113,877.77, reflecting a 2.7% increase for the day. In the past 24 hours, the cryptocurrency has seen trading fluctuations between $110,776.70 and $114,275.25.
Trading volume surged by 15.65% since Tuesday, reaching $53.04 billion at the time of this report. Market capitalization surged to $2.26 trillion, reflecting a 2.67% increase, consistent with today’s price rise. Bitcoin dominance has seen a minor increase of 0.10% since yesterday, now standing at 58.23%. Total open interest for bitcoin futures surged to $84.86 billion, marking a 3.87% increase over the past 24 hours. Bitcoin liquidations fell to $37.96 million for the day, with short sellers accounting for the majority of those losses at $34.96 million. The leftover $3 million was made up of extensive liquidations.