Bitcoin traded near $64,000 on Thursday, posting modest gains alongside US stocks as July producer price index data showed a cooling trend in inflation. The data, which tracks wholesale prices, has been easing for the past month, a sign that price pressures are gradually fading.
Cooling producer prices
The July PPI report, released this week, showed a cooling trend in producer prices. That follows a similar pattern over the past month, suggesting that the disinflationary trend is taking hold. For investors, the data is a welcome sign that inflation is moderating, which typically supports risk assets like stocks and cryptocurrencies.
The cooling trend has been observed over the past month, according to the data. That's a meaningful shift from earlier in the year, when producer prices were running hot. The latest figures add to a growing picture of easing price pressures across the economy.
Bitcoin's modest gain
Bitcoin rose modestly on Thursday, tracking the broader equity market. The move puts the largest cryptocurrency back near the $64,000 level, where it has been trading for much of the week. The gain was modest, but it came alongside a positive session for US stocks, which also benefited from the inflation data.
For Bitcoin, the reaction is consistent with its recent behavior. The cryptocurrency has been moving in tandem with risk assets, and Thursday's data gave traders a reason to add exposure. The cooling inflation trend is seen as a positive for the market, as it reduces the pressure on the Federal Reserve to keep raising rates.
What to watch
The key question now is whether the cooling trend in producer prices will continue. The data has been easing for the past month, but it's still early. Investors will be watching the next inflation reports to see if the trend holds. If it does, it could provide further support for Bitcoin and other risk assets.
For now, Bitcoin remains near $64,000, with the market taking its cues from the macro data. The coming weeks will show whether the cooling trend in inflation is here to stay.
