Bitcoin Bulls Ignore PPI Shock as Whales Drive BTC Price Surge to $102K

Bitcoin (BTC) is showing remarkable strength, as the cryptocurrency approaches its all-time high despite a surprise inflation jolt from the U.S. Producer Price Index (PPI). On December 12, Bitcoin came within 1% of its previous record, trading near $102,000 as large investors, or "whales," fueled the price rally by absorbing sell-side liquidity.

Bitcoin Price Surge Builds on Recent Momentum

Data from Cointelegraph Markets Pro and TradingView revealed a strong rebound for Bitcoin, which gained nearly $5,000 in a single day, continuing the momentum from the prior day. The BTC/USD pair reached $102,000 following the Wall Street market open, marking a near-record high.

Material Indicators, a popular trading resource, highlighted the increasing activity of large-volume traders. The platform's "FireCharts" tool, which tracks cumulative volume delta (CVD), showed that whales were back in action, placing sizable market orders without significant slippage. This suggests that large buyers have found deeper liquidity levels, allowing them to make moves without the price fluctuations that hindered them in previous days when liquidity was thinner.

"Whales are back to making whale-sized market orders," Material Indicators noted, emphasizing the growing activity among these larger traders. As the price of Bitcoin moves through concentrations of ask liquidity, these whales are able to execute substantial trades more efficiently.

Sell-Side Pressure and Market Sentiment

Despite the bullish price action, some analysts are cautious about the sustainability of the rally. Popular trader Skew pointed out that while there is growing buy-side interest, the sell-side pressure remains strong, which could limit the potential upside for Bitcoin in the short term. "As long as passive buyers continue to slurp, we break up eventually," Skew wrote on X (formerly Twitter).

Onchain analyst The Bitcoin Researcher expressed similar caution, suggesting that the current market could face headwinds if short-term holders' profitability does not cool down. The researcher referred to the market value to realized value (MVRV) metric for Bitcoin’s short-term holders (STHs) to assess potential risks. STHs are defined as those who hold Bitcoin for up to 155 days, and a high MVRV suggests speculative behavior that could signal an impending market top.

"I’d like to see the Short-Term Holder MVRV return closer to its baseline," The Bitcoin Researcher posted. "A rising price without an STH-MVRV reset often signals an impending market top—rarely sustainable for long."

Bitcoin Shrugs Off Inflation Shock

Despite concerns about inflation, Bitcoin's price has remained resilient. The release of November’s Producer Price Index (PPI) came in at 3.0%, higher than expected, sparking discussions about stagflation—an economic environment characterized by rising inflation coupled with stagnant economic growth.

The inflation data caught market participants off guard, especially after the Consumer Price Index (CPI) print from the previous day matched expectations. Trading resource The Kobeissi Letter noted that the PPI print suggests inflation is making a "comeback" and raised concerns about stagflation potentially becoming a major issue for the economy.

"Has the era of stagflation begun?" The Kobeissi Letter queried in an X post. This has become a growing concern for analysts and market commentators, as rising inflation and weakness in the labor market could signal economic challenges ahead.

Despite the PPI data, Bitcoin’s price surge has not been dampened. The CME Group’s FedWatch Tool, which tracks market expectations for U.S. Federal Reserve interest rate decisions, now shows a more than 98% probability that the Fed will cut interest rates by 0.25% at its next meeting on December 18. This potential dovish move by the central bank could further boost investor confidence in risk assets like Bitcoin, continuing its bullish run.

Looking Ahead

Bitcoin's ongoing rally, driven by whale activity and a resilient market, showcases the growing interest in the digital asset as an alternative investment amid inflationary pressures. While some onchain signals suggest caution in the short term, the broader trend remains positive as Bitcoin continues to outperform traditional assets in a period of economic uncertainty. With its price nearing all-time highs and the prospect of lower interest rates, Bitcoin’s momentum shows no sign of slowing down—at least for now.