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Bitcoin Retreats on Inflation Data, Macro Focus Intensifies

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Bitcoin declined approximately 3% following January's Producer Price Index (PPI) release, which exceeded market expectations. This hotter-than-anticipated inflation reading has shifted the narrative around Federal Reserve rate cuts, with monetary policy expectations now likely to exert greater influence on cryptocurrency valuations in the near term. The market appears to be recalibrating its outlook as persistent inflationary pressures challenge earlier assumptions about imminent monetary easing.

The next significant macroeconomic catalyst arrives with the March 18 PPI report, which will provide further clarity on inflation trends. This extended period of macro-driven price action suggests traders should monitor traditional economic indicators alongside crypto-specific developments. While short-term volatility may persist, the increased correlation between crypto and traditional financial markets underscores the asset class's maturation and integration into broader investment portfolios.

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