The U.S. Bureau of Labor Statistics released September’s Producer Price Index showing a 6.3% month-over-month rise, a full percentage point above analysts’ consensus of 5.3%. Core PPI, which excludes food and energy, also climbed to 5% versus the expected 4.4%. The surge represents the largest monthly increase since March 2022 and the biggest 12-month gain since December 2022.
Market reaction and bond yields
The stronger-than-expected inflation reading added pressure to risk assets, pushing Bitcoin down 1.8% to a low not seen since September 18. The cryptocurrency briefly traded below the $80,000 threshold before finding footing around $81,000. Simultaneously, the yield on the 10-year U.S. Treasury fell about 3%, reaching its lowest level since late September, suggesting that bond markets were not reacting to the inflation surprise in the usual way.
Economists noted that the yield decline points to a decoupling of bond prices from macro data, with market participants focusing more on the federal budget deficit than on short-term inflation surprises. Former Goldman Sachs FX strategist Robin Brooks highlighted that the correlation between data surprises and 10-year yield moves had turned negative by the end of August.
Technical outlook for Bitcoin
Traders are now watching two exponential moving averages that have historically acted as support in early-stage bull markets. The 21-week EMA sits near $76,144, while the 50-week EMA is around $78,459. Analyst Rekt Capital suggested that a volatile retest of these levels could provide a bottom for the recent pullback, provided Bitcoin does not break below them.
A weekly close near $83,700 was deemed weak by analyst Aksel Kibar, who warned that Bitcoin may continue to trade within a broad consolidation range roughly between $60,000 and $82,800. The lower bound of $75,000 could serve as a negation level for the rectangle-bottom pattern that has formed in recent weeks.
Why it matters
The unexpected rise in producer prices reinforces concerns that inflationary pressures remain elevated, affecting both traditional markets and digital assets. Bitcoin’s dip below $80,000 underscores its sensitivity to macroeconomic data, while the unusual bond-yield response hints at shifting investor priorities. Technical indicators suggest that Bitcoin’s next move will hinge on whether it can hold above key moving-average supports, a factor that could shape market sentiment in the coming weeks.
