Bitcoin Slides Below $77,000 as US PPI, Bond Yields Jump

The US Personal Consumption Expenditures price index is the Federal Reserve’s preferred inflation gauge and a key input for expectations on interest rates. July PCE inflation came in above market forecasts, signaling that price pressures remain persistent and reducing confidence in near-term policy easing. The surprise prompted investors to reassess the outlook for borrowing costs, weighing on risk appetite across cryptocurrencies, equities and traditional safe-haven assets.

Bitcoin fell below $78,000 after the July PCE release, while US stocks and gold also declined as investors moved to reduce risk exposure. The synchronized selloff reflected concern that the Federal Reserve may need to keep interest rates elevated for longer than markets had anticipated. Attention is now shifting to Nvidia’s earnings, which could add volatility as traders assess artificial-intelligence demand, corporate spending and the broader outlook for technology shares.

Long-dated U.S. Treasury yields remain elevated as investors demand greater compensation for inflation, widening fiscal deficits and heavy government debt supply. Higher yields raise corporate discount rates and the opportunity cost of holding non-yielding assets, typically weighing on both equities and cryptocurrencies. Bitcoin’s divergence from a broad Wall Street selloff is therefore notable, though it does not eliminate the macroeconomic pressure facing risk assets.

Relief from the U.S. Treasury’s expanded buyback of older long-term debt lasted only one session. On Aug. 20, long-bond yields rebounded to about 5.2% as oil prices climbed and all three major U.S. stock indexes closed lower. Bitcoin extended its short squeeze on Aug. 21, briefly breaking above $75,000. Analysts attributed much of the rally to the covering of nearly $3 billion in bearish positions, warning that persistently high rates could still force another repricing across risk markets.

The 30-year US Treasury yield is a key benchmark for long-term borrowing and global asset valuations, influencing mortgages, corporate financing and investors’ required returns. Its rise toward levels last seen before the global financial crisis increases the appeal of risk-free government debt and raises the opportunity cost of holding non-yielding assets such as Bitcoin, tightening financial conditions and weighing on risk appetite.

The 30-year yield climbed above 5.2%, its highest level since 2007 and a near 19-year peak. Pressure intensified after three Federal Reserve officials made an unusually coordinated case for higher interest rates, reinforcing expectations that policy could remain restrictive or tighten further. The combination of a Treasury selloff and hawkish Fed signals pushed Bitcoin below the $80,000 threshold as investors cut exposure to risk assets.

The Personal Consumption Expenditures (PCE) price index, released by the US Commerce Department's Bureau of Economic Analysis (BEA), is a key gauge used by the Federal Reserve to assess inflation and set interest-rate policy. The May reading rose to a three-year high, cooling expectations for the timing of rate cuts. US stocks weakened, weighing on risk assets and exposing Bitcoin to concentrated selling pressure.

Bitcoin plunged to $58,000 following the US May PCE data, marking a 21-month low, while inflation concerns also sent US stocks lower in volatile trading. The rapid correction triggered cascading closures of leveraged positions, with more than $600 million liquidated across the cryptocurrency market in just one hour. Some traders questioned whether the market had been “manipulated.”

The U.S. Labor Department's Producer Price Index (PPI) measures costs at the business level and is often viewed as a leading indicator of consumer inflation. The annual rate rose to 6% in April, suggesting price pressures could spread again and prompting markets to reassess the Federal Reserve's rate-cut timetable. The prospect of interest rates remaining elevated is especially significant for Bitcoin, which relies heavily on liquidity.

Bitcoin quickly fell below $80,000 after the 6% annual PPI reading for April was released, briefly dropping under $79,000 intraday to a new recent low watched by the market. Selling intensified as leveraged long positions were unwound, while other cryptocurrencies also weakened. Attention has now shifted to whether inflation will continue to accelerate and how the Fed will respond at its upcoming policy meetings.

Bitcoin (BTC) is highly sensitive to inflation and interest-rate expectations. A smaller-than-expected increase in the U.S. Producer Price Index (PPI) signaled easing upstream price pressures and raised expectations of a shift toward looser monetary policy, lifting risk assets including cryptocurrencies. The $76,000 level has become a key test of whether the rebound can continue.

In the latest rally, BTC briefly broke above $76,000 after the U.S. PPI release, posting its strongest performance since mid-March, but it subsequently failed to hold that level. On-chain analytics firm CryptoQuant warned of mounting near-term selling pressure, while traders realized profits on roughly 63,000 BTC during the advance. The market is now watching whether Bitcoin can regain a firm foothold above $76,000.

Bitcoin and risk assets such as U.S. stocks are highly sensitive to the outlook for U.S. interest rates. A hotter-than-expected Producer Price Index from the U.S. Labor Department pushed back market expectations for Federal Reserve rate cuts. Persistent bond-market concerns over inflation and broader economic risks drove capital toward safe-haven assets such as gold, putting cryptocurrencies under selling pressure.

Bitcoin initially fell to about $65,000 in a weekend sell-off, while Solana, XRP and Dogecoin each dropped about 6%. Although Bitcoin and U.S. stocks briefly stabilized afterward, the cryptocurrency failed to hold above $66,000. Market analysis remained cautious on March 27, with Bitcoin holders' unrealized losses estimated at $600 billion. Only some AI-related tokens continued to attract buying interest.

The US Labor Department's producer price index (PPI) for January rose more than the market expected, indicating that business costs and inflationary pressures remain persistent. Investors responded by scaling back expectations for near-term Federal Reserve rate cuts, pulling money from volatile risk assets such as Bitcoin and turning to precious metals as a haven.

Bitcoin fell nearly 3% at one point after the January PPI data was released and approached another technical breakdown zone. Gold climbed to around a one-month high, while silver also advanced. Markets are now focused on the Federal Reserve's next interest-rate signals and whether persistent inflation will further delay rate cuts.

Brent crude’s surge to $110 a barrel has revived inflation concerns and put the Federal Reserve’s interest-rate path back at the center of global markets. Persistently higher energy costs could restrict the central bank’s room to ease policy and potentially strengthen the case for another increase. Rising U.S. Treasury yields would raise discount rates and tighten financial conditions, creating a particularly difficult backdrop for richly valued equities and volatile crypto assets.

Investors are awaiting the U.S. core consumer price index due on Sept. 11 for clues ahead of the Federal Reserve’s policy decision next week. Bitcoin fell below $79,000 and remained volatile as traders raised the odds of a rate hike. A stronger-than-expected inflation reading could push Treasury yields higher and intensify selling across stocks and cryptocurrencies, while a softer print may ease immediate concerns that policymakers will tighten again.

U.S. government bonds are again setting the tone for risk assets, with the 10-year Treasury yield approaching 5% as investors brace for persistent inflation and the possibility of renewed Federal Reserve tightening. Higher risk-free rates raise funding costs and make dollar assets more attractive, creating a difficult backdrop for volatile markets such as cryptocurrencies and weakening demand for Bitcoin.

Bitcoin lost support at $78,000 ahead of the U.S. consumer price index release and briefly fell below $77,000, while market-implied odds of a Federal Reserve rate increase climbed to about 70%. Traders are now watching whether the inflation report can push the 10-year Treasury yield through the 5% threshold, a move that could intensify macroeconomic pressure on Bitcoin and the broader crypto market.