Bitcoin Falls Below $77,000 as Hot US PPI Revives Fed Rate-Hike Fears

Key Takeaways

• Bitcoin fell around 2% below $77,000 as accelerating US producer inflation and rising Treasury yields pressured risk-sensitive assets.
• The broader crypto sell-off triggered approximately $456 million in liquidations, with long positions accounting for about 78% of the total.
• US CPI data and the Federal Reserve’s September 15–16 policy meeting are the next major catalysts for Bitcoin and the wider cryptocurrency market.

Bitcoin Price Drops Below $77,000

Bitcoin extended its decline on September 11, falling below the psychologically important $77,000 level as traders reduced exposure to cryptocurrencies following the latest US inflation report.

The world’s largest cryptocurrency dropped around 2% and traded near $76,800, after reaching an intraday low of approximately $76,550. The decline left Bitcoin more than 6% below the three-month high of $82,164 recorded earlier in September.

Selling pressure also spread across major altcoins. Ethereum declined around 1% to trade near $2,445, while BNB fell towards $711. XRP lost almost 4% to approximately $1.34, and Zcash recorded a double-digit percentage decline.

The synchronised downturn suggested that the move was being driven primarily by macroeconomic conditions rather than a development specific to Bitcoin. Rising inflation expectations, higher government bond yields and uncertainty surrounding the Federal Reserve’s next interest-rate decision all contributed to weaker risk appetite.

August US PPI Shows Renewed Inflation Pressure

The US Producer Price Index for final demand increased 0.4% month over month in August, following a revised 0.1% rise in July. On an annual basis, producer prices accelerated to 5.4% from 4.8%.

The monthly increase broadly matched economists’ expectations, although the year-over-year rate was slightly higher than some forecasts. The figures therefore showed a meaningful acceleration in wholesale inflation, even if the report was not uniformly stronger than expected.

Goods prices rose 1.1% during August, with energy prices climbing 4.2%. Diesel fuel prices surged 24.1%, while gasoline, jet fuel and home-heating oil prices also increased.

Services prices advanced by a more moderate 0.1%, although transportation and warehousing services rose 2.3%. The underlying producer-price measure excluding food, energy and trade services increased 0.3% during the month and 4.7% from a year earlier.

The composition of the report showed that energy was the largest driver of the monthly increase. However, persistent underlying inflation and rising transportation costs suggested that price pressures were not limited entirely to volatile fuel markets.

Oil Above $100 Adds to Inflation Concerns

The PPI report arrived as crude oil prices remained above $100 per barrel amid continuing supply concerns in the Middle East. Higher energy prices have raised fears that production and transportation costs could spread into a wider range of consumer goods and services.

A prolonged period of expensive oil could make it more difficult for inflation to return sustainably towards the Federal Reserve’s 2% target. It could also complicate monetary policy because higher interest rates may have a limited immediate effect on inflation caused by supply disruptions.

Nevertheless, persistent energy-driven inflation can influence consumer expectations and feed into broader pricing decisions. This risk has encouraged bond and currency markets to price in a greater possibility of further monetary tightening.

Treasury Yields Rise as Rate-Hike Expectations Increase

The benchmark 10-year US Treasury yield climbed towards 5%, reaching its highest level since 2023. The rise reflected a combination of stronger inflation concerns, higher oil prices and expectations that the Federal Reserve may increase interest rates again.

Higher Treasury yields can create pressure on Bitcoin and other cryptocurrencies. Government bonds become more attractive relative to assets that do not generate interest, while tighter financial conditions may reduce the amount of liquidity available for speculative trading.

Rising yields can also support the US dollar. Because Bitcoin is primarily priced in dollars, a stronger US currency can make the cryptocurrency more expensive for international buyers and contribute to weaker demand.

The relationship is not consistent during every trading session, but Bitcoin has frequently struggled when real yields and expectations for US interest rates rise rapidly. Similar pressure was visible across technology stocks and other growth-sensitive assets.

Crypto Liquidations Reach $456 Million

The decline triggered widespread forced closures in the leveraged cryptocurrency market. Liquidations across major exchanges reached approximately $456 million over 24 hours, with long positions accounting for around $360 million, or 78% of the total.

The concentration of long liquidations showed that many traders had been positioned for Bitcoin to continue its early-September recovery. When the price moved below short-term support levels, exchanges automatically closed positions that no longer met margin requirements.

This process can accelerate a downturn. Forced sales push prices lower, potentially triggering additional stop orders and liquidations across other leveraged positions.

Large liquidation events may remove excessive leverage from the market, but they do not guarantee an immediate recovery. The next direction will depend on spot demand, institutional flows, funding rates and the broader macroeconomic environment.

US CPI Is the Next Major Market Catalyst

Attention now turns to the August US Consumer Price Index, scheduled for release on September 11 at 8:30 a.m. ET. The CPI report will provide a broader measure of inflation and could materially change expectations before the Federal Reserve’s policy decision.

A stronger-than-expected CPI reading would support the argument that inflation remains persistent. That outcome could increase rate-hike expectations, push Treasury yields higher and create further pressure on Bitcoin.

A weaker reading could reduce expectations for immediate monetary tightening. Falling yields and a softer dollar could help Bitcoin stabilise or recover, although volatility may remain elevated ahead of the Federal Reserve meeting.

The Federal Open Market Committee is scheduled to meet on September 15–16. Interest-rate futures indicated that the probability of a 25-basis-point increase had risen to around 70%, although market pricing may change significantly after the CPI release.

Can Bitcoin Hold Above $75,000?

Bitcoin’s fall below $77,000 places greater attention on the $75,000 area, which represents the next important psychological and technical reference level.

A sustained move below $75,000 could expose Bitcoin to further selling towards $72,000 and potentially $70,000. However, a decline to these levels is not guaranteed and would probably require an additional catalyst, such as a hotter CPI report, a sharp increase in Treasury yields or a more hawkish Federal Reserve message.

On the upside, Bitcoin would need to recover above the $78,000–$80,000 range to reduce immediate downside pressure. The recent high near $82,164 would then become the next major resistance level.

Until the CPI report and Federal Reserve decision are completed, Bitcoin may remain highly sensitive to changes in interest-rate expectations. The combination of elevated leverage, rising bond yields and uncertain inflation makes sharp price movements possible in either direction.