Bitcoin gave up part of its recent gains on Thursday after a stronger-than-expected U.S. inflation report raised fresh concerns about how long the Federal Reserve may keep interest rates elevated.
The world’s largest cryptocurrency retreated toward the $62,500 level after briefly moving above $63,000 earlier in the day. The decline followed the release of new U.S. Producer Price Index (PPI) data, which showed inflation pressures remain stronger than economists had anticipated.
With the Federal Reserve’s June policy meeting just days away, investors are once again weighing the impact of persistent inflation on risk assets, including cryptocurrencies.
Producer Inflation Comes in Above Expectations
According to data released by the U.S. Bureau of Labor Statistics, producer prices rose 1.1% in May, significantly higher than Wall Street forecasts calling for a 0.6% increase.
On an annual basis, producer inflation climbed to 6.5%, exceeding analyst expectations of 6.4% and accelerating from the previous reading of 6.0%.
Meanwhile, Core PPI, which excludes food and energy prices, increased 0.8%, double the market forecast of 0.4%.
The stronger-than-expected inflation figures immediately impacted financial markets. Bitcoin quickly reversed part of its earlier rally, with traders reacting to concerns that the Federal Reserve may need to maintain restrictive monetary policy for longer than previously expected.
Market data showed a sharp sell-off on lower timeframes as investors reassessed interest rate expectations ahead of the upcoming Federal Open Market Committee meeting.
Rising Oil Prices Add More Pressure
Inflation concerns were further amplified by developments in the energy market.
Crude oil prices surged to $90.8 per barrel following comments from U.S. President Donald Trump regarding potential military action against Iran and the possibility of U.S. control over portions of the country’s oil infrastructure.
At the same time, new inventory data suggested global oil supplies may be tightening, raising fears that higher energy costs could fuel additional inflationary pressure in the coming months.
For Bitcoin and other risk assets, rising inflation combined with higher energy prices creates additional uncertainty around future monetary policy decisions.
Bitcoin Holds Critical Support Zone
Despite the pullback, Bitcoin remains above a key technical support area that analysts continue to monitor closely.
Crypto analyst Daan Crypto Trades noted that buyers are actively defending the $60,000 region, which aligns closely with Bitcoin’s weekly 200 moving average.
According to the analyst, maintaining support above that level could open the door for a recovery toward higher resistance zones. However, a break below $60,000 would likely strengthen the broader bearish trend.
Technical charts show Bitcoin consolidating within a symmetrical triangle pattern on the four-hour timeframe after rebounding from last week’s sell-off.
Momentum indicators have shown modest improvement, with the MACD generating a bullish crossover while the Relative Strength Index moves back toward neutral territory.
Resistance Near $65K Remains Key
Data from CoinGlass indicates a large cluster of leveraged short positions sits between $63,500 and $65,000.
If Bitcoin manages to break through nearby resistance, those positions could face liquidation, potentially triggering a short squeeze that drives prices higher.
However, that same area also represents a major technical hurdle. Bitcoin recently broke below the neckline of a rounding-top pattern near $65,000, turning the former support level into significant resistance.
Institutional Demand Continues to Slow
While Bitcoin has stabilized above support, broader market indicators suggest investor enthusiasm has weakened.
Blockchain analytics firm Glassnode reported that the 30-day average trading volume for U.S. spot Bitcoin ETFs has fallen from $4.4 billion per day in October 2025 to approximately $960 million per day, representing a 78% decline.
Trading activity among publicly listed Bitcoin treasury companies has also dropped by 49%, according to Glassnode.
The data suggests institutional and speculative demand for Bitcoin exposure through traditional financial products has cooled considerably in recent months.
All Eyes on the Federal Reserve
Investor attention is now shifting toward the Federal Open Market Committee meeting scheduled for June 16-17 under Trump-backed Fed Chair Kevin Warsh.
Before the latest inflation report, markets largely expected policymakers to leave interest rates unchanged. However, stronger producer inflation and rising oil prices have complicated that outlook.
Although consumer inflation data released earlier in the week came in below expectations, the latest producer inflation numbers have reignited concerns that inflation remains persistent.
For Bitcoin traders, the market is now caught between improving technical conditions and renewed macroeconomic uncertainty, setting the stage for heightened volatility in the days ahead.
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