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Bitcoin fell below $77,000 on Thursday as hotter-than-expected US producer price data and surging oil prices pushed long-dated Treasury yields to multi-decade highs. The August PPI rose 5.4% year-on-year, exceeding forecasts, while WTI crude broke above $100 per barrel for the first time since May. The 30-year Treasury yield climbed to 5.353%, its highest since June 2007, despite a $6 billion government buyback operation. Market odds of a quarter-point Fed rate hike at the September 16 meeting jumped to 69.8% from 61.2% a day earlier. The European Central Bank also raised rates by 0.25%, its second hike of 2026. Traders now await Friday’s CPI report, the last major inflation reading before the Fed’s decision, for direction on whether tightening expectations will persist or ease.
Key Elements
Bitcoin’s price tumbled below the $77,000 mark just as Thursday’s Wall Street session got underway, caught in a broader unwind of risk appetite as investors absorbed a hotter-than-expected US inflation reading and a fresh surge in energy prices.
The cryptocurrency was tracking losses of roughly 2% for the day, according to data from TradingView, mirroring weakness across equity markets as macro conditions tightened. The catalyst mix was difficult to dismiss: producer prices came in above forecasts, crude oil broke through a key psychological level, and long-dated Treasury yields climbed to levels not seen in nearly two decades.
The US 30-year bond yield rose to 5.353%, its highest since June 2007. The move came despite the Treasury carrying out the first of its stepped-up debt buyback operations, repurchasing $6 billion worth of government debt on Wednesday. The 10-year yield also advanced, reaching 4.924%, a level last seen in November 2023.
The Kobeissi Letter, a trading-focused commentary service, captured the market’s defiance succinctly in a post on X. “The bond market is quite literally fighting the US Treasury,” it wrote.
The August Producer Price Index climbed 5.4% year-on-year, exceeding consensus expectations by 0.1 percentage point. The Bureau of Labor Statistics also revised July’s headline PPI figure higher. In its official release, the BLS noted that the index for final demand less foods, energy, and trade services rose 0.3% in August after advancing 0.4% in July. Over the 12 months through August, that measure gained 4.7%.
Rate expectations shifted quickly following the data. CME Group’s FedWatch Tool showed the probability of a quarter-point rate hike at the Federal Reserve’s September 16 meeting climbing to 69.8% at the time of writing, up from 61.2% the previous day. The jump underscores how sensitive risk assets remain to any signal that the central bank’s tightening path could extend further.
The pressure wasn’t confined to inflation data alone. Escalating tensions in the Middle East pushed WTI crude above $100 per barrel for the first time since May 21, while Brent crude topped $105, approaching a 16-week high. Higher energy costs tend to filter quickly into inflation expectations, which in turn feed into bond yields and interest-rate forecasts—key variables for investors deciding between growth-oriented and defensive positions.
For crypto markets, that transmission mechanism carries particular weight. Bitcoin, which generates no cash flows or coupon payments to offset movements in discount rates, often behaves as a high-beta proxy for global liquidity conditions. When real yields climb and central bank policy expectations firm, the relative appeal of non-yielding assets tends to diminish.
The bond market’s momentum was central to the risk-off tone. The fact that yields continued to press higher even after the Treasury’s buyback operation suggested to some investors that underlying demand for long-duration assets may be weakening—or that inflation and rate expectations are simply overwhelming any intervention efforts.
Earlier coverage from Cointelegraph had already flagged rising concerns over Fed policy after stronger-than-expected nonfarm payrolls data sent Bitcoin back below $80,000. Thursday’s PPI print adds to that same tightening narrative rather than easing it.
Attention now turns to Friday’s release of the Consumer Price Index, the last major inflation report before the Fed’s rate decision. For Bitcoin traders, the CPI reading could either validate the market’s higher-for-longer fears or introduce enough cooling to shift expectations back toward easing.
Policy tightening is not limited to the United States. The European Central Bank approved its own quarter-point rate hike on Thursday, the second such move in 2026. While the ECB’s actions don’t directly determine Fed policy, additional tightening outside the US can reinforce a global backdrop of reduced liquidity, which generally weighs on high-duration, risk-sensitive markets.
Bitcoin’s drop below $77,000 therefore reads less like a single-coin story and more like the outcome of a broader macro re-pricing: oil-driven inflation concerns, accelerating bond yields, and a Fed path that investors are increasingly pricing as restrictive. Until the next inflation reading provides clarity, the cryptocurrency is likely to remain highly responsive to macro headlines rather than crypto-specific catalysts.
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Source: finance.biggo.com