Bitcoin Falls Below $80K as US Inflation Jumps to 4-Year High

Bitcoin fell below $80,000 on Thursday after a surprise jump in US inflation data spooked investors across financial markets.

The drop came after the release of the Producer Price Index (PPI) — a measure of the prices businesses receive for their goods and services before they reach shoppers. It's an early warning sign of where consumer prices might be headed.

The numbers were much higher than experts predicted:

• PPI rose 6.3%, a full 100 basis points (1 percentage point) above expectations
• This was the biggest monthly jump since March 2022
• Core PPI (which strips out volatile food and energy prices) rose 5%, versus the 4.4% expected

Why does this matter for Bitcoin? When inflation (the rising cost of goods over time) runs hot, investors often get nervous and sell off riskier investments like crypto and tech stocks. Bitcoin dipped as much as 1.8% to its lowest level since September 18, before bouncing back to around $81,000.

This came just a day after another inflation report, the Consumer Price Index (CPI), also came in higher than expected. Markets were already jittery from a tech sell-off in South Korea, where the KOSPI stock index crashed 7.5%.

One surprising twist: Normally, high inflation pushes bond yields (the return investors earn for lending money to the government) higher. But this time, the 10-year US bond yield actually *fell* nearly 3%. Experts like Mohamed El-Erian noted that markets seem more focused on the US government's growing budget deficit than on inflation data.

What's next for Bitcoin? Analysts are watching key support levels — price zones where buyers tend to step in. Traders pointed to important moving averages (average prices over time) at around $76,144 and $78,459 as possible safety nets. Some analysts believe Bitcoin could still hold its overall upward trend, while others warn it may slip back into a wider trading range.

In short: hot inflation data knocked Bitcoin below $80K, but the broader picture remains uncertain.

This is an AI-generated summary. Read the original article at: https://cointelegraph.com/markets/bitcoin-price-breaks-under-80k-after-us-ppi-gains-most-in-over-4-years?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound