Bitcoin dropped below $77,000 as broader crypto markets came under pressure following stronger-than-expected U.S. producer inflation. The cryptocurrency fell nearly 2% over 24 hours and is now down more than 5% for the week.
August producer prices increased 5.4%, exceeding the 5.1% forecast and pushing 30-year Treasury yields to a 19-year high. The CoinDesk 20 index declined roughly 3%, while 95 of the CoinDesk 100 assets posted losses.
The inflation data also caused traders to increase bets that the Federal Reserve could raise interest rates at its Sept. 15-16 meeting.
Zcash recorded the sharpest decline among major cryptocurrencies, falling about 12% to roughly $1,134. Despite the drop, the token remains up around 34% over the past week and nearly 145% over the last month.
Hyperliquid’s HYPE declined about 7% to just under $79, taking its weekly losses to roughly 10%. Dogecoin fell around 6% to 8 cents, while XRP dropped about 3% to $1.34 and is nearly 7% lower over seven days. Solana also declined more than 3%, slipping below $100.
Ether declined nearly 2% to about $2,445 but remained down less than 3% for the week. BNB lost slightly more than 1% to approximately $710. Tron was the only major cryptocurrency to remain flat at around 34 cents and is still more than 3% higher on the week.
Bitget analyst Lewis Huang previously identified $76,270 as a key technical support level for bitcoin. With the cryptocurrency trading below $77,000, that support is now less than $800 away.
Oil prices added to the inflation concerns. Brent crude surged more than 6% above $107 per barrel, while West Texas Intermediate traded near $102. Rising energy costs could create additional inflationary pressure as the Federal Reserve assesses its next policy move.
Treasury yields also climbed, with the 10-year yield approaching 5% and the two-year yield moving above 4.5%.
Gold slipped toward $4,330, while the dollar index strengthened near 99. The S&P 500 fell to around 7,594, marking its fourth consecutive decline. Asian markets also weakened, with Japan down nearly 2%, South Korea losing more than 3% and Hong Kong falling close to 1%.
Higher real yields can pressure crypto in two ways. They make government bonds more appealing compared with assets such as bitcoin that do not generate yield, while also making leveraged positions more expensive to maintain.
Bitcoin investment products in the U.S. showed signs of that pressure, with spot ETFs recording $120 million in outflows on Wednesday, more than twice the previous day’s amount. Ether, XRP and solana funds, however, posted inflows during the same period.
The August CPI report is scheduled for release at 8:30 a.m. ET. Economists expect headline inflation to rise 3.4% year over year, while core inflation is forecast at 2.4%.
Interest-rate futures are now assigning nearly a 70% probability to a Fed rate hike at the Sept. 15-16 meeting, up from roughly 50% two weeks earlier.
“Markets are already positioned for a more hawkish Fed and a likely rate increase,” said Joel Kruger, market strategist at LMAX Group.
The $76,270 level remains particularly important for bitcoin, as the cryptocurrency has not traded below that price since its August rally began.
