July’s 0.9% monthly PPI surge (vs. 0.2% expected) strengthened Fed hawkish bets. Higher inflation may delay rate cuts, increasing the opportunity cost of holding non - interest - bearing assets like Bitcoin. Investors shifted to yield - bearing assets (e.g., Treasuries), reducing crypto demand. For Bitcoin, this broke its short - term correlation with risk assets, as market pricing of prolonged high rates weighed on its "inflation hedge" narrative, pressuring prices.
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Ether’s 8% drop reflects elevated volatility after a sharp rally. This could be a healthy correction rather than full trend reversal. Key to watch: ETH’s correlation with Bitcoin, staking activity, and ETH/BTC ratio. Sustained weakness below support may shift sentiment toward bearish continuation.
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Ethereum’s 1.5% gain amid Bitcoin’s strength signals ecosystem resilience. Layer 2 growth, DeFi innovation, and NFT activity underpin its value, offering unique utility that supports price independently of Bitcoin.
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