Bitcoin dropped below $80,000 on Wednesday after the April Producer Price Index came in far hotter than expected, adding to inflation fears already stoked by Tuesday's CPI report. The session low hit $79,557.
Producer prices jump 1.4%
The Bureau of Labor Statistics reported that final demand PPI rose 1.4% month-over-month, more than double the 0.5% consensus and well above the prior 0.7%. On an annual basis, headline PPI accelerated to 6.0% from 4.3%, versus the 4.9% expected. Core PPI — excluding food and energy — climbed 1.0% month-over-month against expectations for 0.3%. The core annual figure moved to 5.2% from 4.0%.
Even the narrower measure that strips out food, energy, and trade services rose 0.6% month-over-month and 4.4% year-over-year. The data follows Tuesday's CPI report which showed headline consumer inflation quickened to 4.8% year-over-year from 3.3%, also above the 4.5% consensus.
Stocks, bonds, dollar react
The cross-asset response was swift. The SPY sold off from above $740 to $737. The 30-year Treasury yield pushed near 5.034%, the 10-year yield near 4.471%. The US Dollar Index sat around 98.49, while WTI crude held near $102.15. Markets attempted a modest stabilization after the initial selloff, but the rebound remained fragile.
Bitcoin tries to reclaim $80,000
For Bitcoin, the immediate issue is acceptance below $80,000. A quick reclaim would narrow the damage, but continued trade below that level leaves the $79,557 low exposed. The next signal for recovery is Bitcoin getting back above $80,000 while the SPY stabilizes and yields stop rising. Until then, the downside risk remains open.
