Bitcoin Slumps to $77,000 as Rate-Hike Odds Jump to 74% Following PPI Report

The recent PPI report has pushed Bitcoin's price down to around $77,000 as markets increase their expectations for a Federal Reserve rate hike. The August Producer Price Index showed an annual inflation rate of 5.4%, accelerating from 4.8% in July and exceeding the 5.3% expectation.

The market reaction was initially negative, with Bitcoin slipping toward $77,000, while U.S. Treasury yields moved higher and U.S. equities weakened. However, the 10-year Treasury yield later pulled back from its highs after some bond traders viewed the PPI report as insufficient to force a more aggressive tightening outlook.

The Federal Reserve's September meeting is now just days away, and Bitcoin's recovery will face a crucial test. A stronger-than-expected CPI reading on Friday could further increase expectations for a rate hike, creating another headwind for Bitcoin. On the other hand, a cooler-than-expected CPI could undermine some of the rate-hike repricing triggered by the jobs and PPI data.

Bitcoin's technical picture remains clear: $80,000 is the key upside threshold, while $77,000-$77,600 is the important downside zone. A clean reclaim of $80,000 after CPI would suggest buyers are absorbing the macro pressure, while a break below $77,000 would indicate that the inflation and rate-hike narrative is gaining control.