The total crypto market cap slid 2.6% to $2.61 trillion on Wednesday, erasing gains from earlier in the week after a red-hot U.S. Producer Price Index report rattled bond markets. Bitcoin dropped 2.5% to $79,221, roughly 4% below its recent channel high of $82,742, while Toncoin cratered more than 9% to $2.092. The selloff came as traders repriced the odds of another Federal Reserve rate hike, with the April PPI coming in at 6% year-over-year — well above the 4.9% consensus and the highest since January 2023.
PPI print spooks markets
Services accounted for about 60% of the PPI gain, a sign that sticky inflation is still embedded in the economy. Bond traders responded by pricing in renewed rate hike risk, a headwind for risk assets like crypto. The data landed just days before Jerome Powell's term as Fed Chair ends Friday, with Kevin Warsh confirmed as his successor in a razor-thin 54-45 Senate vote — the narrowest margin in history for a Fed chair.
Bitcoin ETF outflows intensify
U.S. spot Bitcoin ETFs recorded total net outflows of $635 million on May 13 (ET), with BlackRock's IBIT alone shedding about $285 million. That's the largest single-day outflow for the fund in months, suggesting institutional investors are pulling back amid the macro uncertainty. The broader market is now watching whether Bitcoin can hold the 0.236 Fibonacci support at $77,979; a daily close below that level opens the door to $75,033.
Toncoin's sharp reversal
Toncoin had surged 124% on the launch of the Acton toolchain, but the rally has completely reversed. The token is now trading at $2.092, down 28% from its $2.91 peak. Technical support sits at $2.08, with the 20-day EMA at $1.97 and the 0.618 Fib at $1.88. The speed of the selloff raises questions about whether the Acton hype was fully priced in.
Pardon watch: SBF and Jho Low
In a separate development, the Wall Street Journal reported that the White House is weighing up to 250 pardons to mark America's 250th birthday. Among those seeking clemency are FTX founder Sam Bankman-Fried and 1MDB architect Jho Low. While not directly moving markets, the news adds another layer of uncertainty for an industry still haunted by the FTX collapse.
The total crypto market cap is sitting on the 0.236 Fibonacci level at $2.60 trillion. If that breaks, the next supports are $2.53 trillion, $2.47 trillion, and $2.41 trillion. With a hawkish Fed transition underway and ETF outflows accelerating, the near-term path of least resistance looks lower. Friday's close will be the first real test of the new Fed chair's impact on crypto sentiment.
