Bitcoin Plunges on Hotter-Than-Expected PPI Data, Yields Rise to 4.90%
The recent PPI data release has caused a stir in the markets, with Bitcoin (BTC) taking a significant hit. The August PPI inflation rate came in at 5.4% year-over-year, exceeding the estimated 5.3%. This has put pressure on rate hike expectations ahead of the September 16 Fed meeting.
The bond market is also feeling the effects, with the 10-year Treasury yield crossing 4.90% for the first time since November 2023. This increase in yields makes safe government bonds more attractive, pulling money away from riskier assets like Bitcoin.
According to Bull Theory on X, the last time PPI data dropped, Bitcoin pumped 26% in eight days. However, this time around, the outcome was opposite, with hotter-than-expected inflation removing the rate hold narrative that had been driving crypto higher since Fed Governor Christopher Waller's comments.
Bitcoin is now testing the $76,000 to $76,500 support zone, where it originally launched its rally. The RSI is showing a bearish divergence, and spot ETFs have posted $166.89 million in outflows this week through Wednesday.