Why is bitcoin down today: Hotter-than-expected inflation data knocks BTC below $80,000
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U.S. PPI surged well above forecasts in April, reviving concerns that rising oil prices and Iran-related supply risks may feed another inflation wave.
By Krisztian Sandor and Helene Braun|Edited by Aoyon Ashraf
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Matt Mena, senior crypto research strategist at 21Shares, said the inflation data reflects mounting macro pressure, partly tied to the conflict in Iran, but noted that bitcoin’s ability to hold above $80,000 remains an important signal for traders.
Mena said a prolonged break below $80,000 could send bitcoin toward $78,000, with $75,000 becoming the next major support zone if selling intensifies. Still, he argued the latest inflation shock may represent the “final flush of weak hands” before several potential bullish catalysts return to focus.
He added that improving macro conditions tied to President Donald Trump’s upcoming China visit could also help lift sentiment if tensions ease. Mena said bitcoin reclaiming the $82,000 resistance level could open the door to a rally toward $85,000 and potentially $90,000, while leaving a move toward $100,000 “on the table” by the end of the quarter.
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U.S. producer prices for April came in far hotter than expected on Wednesday, complicating the Federal Reserve’s path forward to ease monetary policy later this year.
The April Producer Price Index rose 1.4% month-over-month, nearly triple economists’ expectations for a 0.5% increase. Annual producer inflation accelerated to 6%, while core PPI excluding food and energy climbed 1% on the month and 5.2% year-over-year, both well above forecasts.
The report reinforced that inflation is reaccelerating after Tuesday’s consumer price index (CPI) rose 3.8% year-over-year, the hottest inflation reading in almost three years.
Bitcoin (BTC), which traded above $81,000 overnight, quickly dropped below the key $80,000 level in the minutes following the release before recovering slightly. The largest cryptocurrency was recently changing hands just above $80,000, down about 0.8% over the past 24 hours.
Equity futures held relatively steady ahead of the U.S. open, with Nasdaq 100 futures up 0.2% and S&P 500 futures little changed.
The inflation surprise adds another layer of uncertainty for the Fed as policymakers navigate rising energy prices tied to the ongoing Iran conflict and persistent concerns over supply disruptions around the Strait of Hormuz. Higher oil prices risk feeding further into inflation data in the months ahead.
The report could also revive discussion of whether the central bank may need to consider additional tightening rather than cuts, even as President Donald Trump continues to pressure the Fed to lower interest rates.
That backdrop is especially delicate as Kevin Warsh prepares to take over leadership of the central bank, with investors closely watching how the incoming chair will balance slowing growth risks against resurgent inflation pressures.
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