Bitcoin rose to its highest level since the early February sell-off after US producer prices rose, but rose less than economists expected in March, with falling oil prices and stronger stock markets helping to fuel the recovery of risky assets.
According to Crypto Slates According to data, Bitcoin surged past the $76,000 mark during early trading hours in the US, with the broader crypto ecosystem adding around $110 billion billion to its market cap in the past 24 hours.
Prevailing market optimism has been largely driven by shifting expectations regarding the Federal Reserve’s monetary policy, exacerbated by unexpected developments in ongoing geopolitical conflicts.
US stocks are rising as short sellers face historic pressure
Meanwhile, the relief rally wasn’t just limited to the cryptocurrency sector.
Bull Theory, a macroeconomic platform, noted that traditional financial markets have absorbed the inflation data with equal gusto, adding nearly $1.4 trillion in market capitalization to US indices in a two-day period.
The tech-rich Nasdaq Composite rose 2.85%, adding $960 billion in value, while the Russell 2000 index of small-cap stocks rose 3%, according to the company. The S&P 500 rose 2.12%, putting it within 100 points of a new historical benchmark.
At the same time, optimism about a stabilization in the Middle East led to a sharp decline in global energy markets, with West Texas Intermediate (WTI) crude falling 6% to settle at $93 per barrel.
For bearish traders positioning themselves against a digital asset recovery, the sudden influx of bullish momentum proved devastating. According to the derivatives market data provider MintGlassThe rapid rise in Bitcoin prices caused a successive wave of liquidations.
More than $100 million in leveraged positions were wiped out in one hour. Total market liquidations quickly surpassed the $650 million mark, with short sellers bearing the brunt of the damage.
Traders betting on price declines lost an estimated $514.94 million, marking the highest level of short liquidations since February’s market volatility.
Against this backdrop, Joao Wedson, the CEO of blockchain analytics company Alphractal, said: declared:
“Most bears liquidated today! Right on April 14th, which is strangely a special and fractal day for Bitcoin!”
Inflation figures fuel fears of an aggressive turn
The main catalyst for Tuesday’s risky environment was the release of the March Producer Price Index (PPI) by the U.S. Bureau of Labor Statistics. The data showed that wholesale inflation is rising, but below Wall Street expectations.
According to the reportTotal PPI rose 4% year-on-year in March, lagging the consensus estimate of 4.7%.
Nevertheless, this represents a notable acceleration from the 3.6% annual increase recorded in February, and the highest annual growth rate in three years.
On a monthly basis, the PPI rose only 0.5%, similar to February’s pace, but came in well below the 1.1% increase predicted by economists.
The core PPI, which excludes the volatile food and energy sectors, was flat at 3.8% year-on-year, undermining market expectations of 4.2%.
Market observers linked the rising inflation rates to the US-Iran war, which sent energy prices soaring and reignited fears of a new wave of inflation.
In a macroeconomic environment characterized by sticky or accelerating inflation data, the Federal Reserve faces increasing pressure to maintain a restrictive interest rate regime for an extended period of time.
As a result, market participants are forced to price out short-term interest rate cuts, betting instead that the central bank will take an aggressive stance and tighten monetary policy.
Historically, high borrowing costs drain liquidity from the broader financial system, putting disproportionate pressure on risk-sensitive assets like Bitcoin and fast-growing tech stocks as capital evolves into safe havens.
The changing narrative around Bitcoin’s role
Meanwhile, BTC’s price rally has also revived a deeper discussion about the cryptocurrency’s place during periods of geopolitical stress.
Bitwise Chief Investment Officer Matt Hougan said Bitcoin has outperformed many traditional assets since the US and Israeli airstrikes began on February 28. According to Hougan, Bitcoin is up 12% during that period, while the S&P 500 is down 1% and gold is down 10%.
This performance has challenged the view that Bitcoin should automatically trade lower during any geopolitical shock due to its reputation as a high-volatility risk asset.
Instead, some market participants increasingly view Bitcoin as two overlapping roles. One is its more established function as a scarce digital asset competing with gold and other stores of value.
The second is a more speculative role related to its potential use in international settlement in a world where global payment systems are becoming increasingly fragmented.
The second idea has gained popularity since the West cut off major Russian banks from the SWIFT network following Moscow’s invasion of Ukraine. This shift accelerated the search for alternatives to traditional dollar-based railroads, especially among countries seeking to reduce exposure to Western financial pressures.
Against that backdrop, the conflict in the Middle East has sparked a new debate over whether Bitcoin could benefit as geopolitical rifts deepen and the appeal of politically neutral payment systems increases.
That argument remains controversial and has not supplanted Bitcoin’s sensitivity to interest rates, liquidity, and stock market movements.
Yet it has become a more visible part of the market conversation as geopolitical tensions rise.