Bitcoin dropped below $80K after April producer inflation surged to its highest monthly increase since 2022.
Bitcoin News
April producer prices rose 1% month-over-month, the steepest monthly gain since March 2022, according to the US Bureau of Labor Statistics.
The reading cleared the 0.3% consensus forecast by a wide margin and followed an upwardly revised 0.2% gain in March. Core producer prices climbed 5.2% year-over-year in April, up from 4% the prior month and above the 4.3% estimate. Headline producer price index (PPI) came in at 6.0% year-over-year against a 4.9% forecast.
Bitcoin (BTC) fell to $79,500 shortly after the data landed on May 13. The move extended losses from the prior session, when April Consumer Price Index (CPI) figures showed headline inflation at 3.8% annually and core CPI at 2.8% year-over-year. The core reading came in one tick above the 2.7% consensus and briefly pushed 10-year Treasury yields toward 4.46%. Two-year Treasury yields held near 4% heading into the May 13 session, with the bond market pricing the Federal Reserve's next move as a hike rather than a cut.
The probability of a rate cut at the Fed's June meeting fell to 1.4%, per CME Group's FedWatch Tool. Odds of a rate hike by year-end rose to roughly 30%, up from 15% a week earlier. Mosaic Asset Company, in the May 12 edition of its newsletter The Market Mosaic, said rising short- and long-end yields "could pose a challenge to stock market valuations" as central bank easing bias shifts toward a more hawkish stance globally.
BTC held a narrow range between $79,700 and $80,200 in the hours following the release. Matt Mena, senior crypto research strategist at 21Shares, said the $80,000 level holding "speaks of the strength of this asset." He added that a confirmed break below $80,000 would likely trigger a retest of $78,000, with $75,000 as the next defensive zone if that level fails.
ETF Outflows Add to Pressure
Bitcoin spot exchange-traded funds (ETFs) recorded $233 million in net outflows on May 12, led by Fidelity's FBTC at $86.13 million, according to SoSoValue. Ethereum (ETH) spot ETFs shed $131 million in the same session, with BlackRock's ETHA responsible for $102 million of that total. Simon-Peter Massabni, head of business development at XS(dot)com, said the reversal from a $622.75 million inflow the prior week points to capital chasing short-term momentum rather than building lasting exposure.
QCP Group's May 13 market note said shelter costs, particularly owners' equivalent rent, drove much of the CPI overshoot, likely reflecting delayed adjustments from the October 2025 BLS shutdown. The stronger concern, the firm wrote, is supercore inflation, defined as core services excluding housing, which accelerated for a third consecutive month. China PPI also turned positive for the first time in 41 months, signaling that the global goods disinflation tailwind from 2024 is fading, QCP added.
BTC perpetual open interest dropped 7% week-over-week to $36.8 billion, consistent with deleveraging below the $80,000 level, according to Nexo analysts. Funding sat at 3.4% annualized, pointing to balanced rather than crowded positioning. Implied volatility compressed alongside spot prices, with the term structure in contango across all tenors: one-week at 35.4%, one-month at 36.2%, three-month at 38.7%, and six-month at 41.8%. Nexo analysts said a clean break above $82,500 or below $79,500 would likely reset both volatility and positioning.
Mena pointed to three near-term catalysts that could shift BTC's direction. The CLARITY Act Senate markup, scheduled for May 15, carries roughly 65% approval odds on Polymarket. Six consecutive weeks of cumulative ETF inflows exceeding $3.5 billion remain on the ledger. The Trump-Xi summit, which began May 13 in Beijing, is the main macro wildcard, with Mena saying a constructive outcome could ease the macro overhang and open a path toward the $82,000 resistance level. Trader Rekt Capital said BTC had confirmed a weekly close below the top of an open CME futures gap and described consolidation within that range as the likely path "until further notice."
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