The Producer Price Index came in hotter than expected on an annual basis on September 10, and bitcoin dropped below $77,000 within minutes. The coin is now down over $3,000 from its Monday peak, with the Consumer Price Index and a Federal Reserve rate decision still ahead this week.
Bitcoin dropped below $77,000 on September 10, extending a slide that has now erased more than $3,000 from its Monday peak. The move followed the release of the Producer Price Index (PPI), the first major US economic data point of the week.
PPI comes in above the Fed's target
The PPI showed a 0.4% increase for the month, roughly in line with expectations. But the annual figure told a different story: producer prices rose 5.4% year-over-year, well above the Federal Reserve's 2% target and 0.1% higher than economists had anticipated. That gap could be the main reason behind bitcoin's immediate decline.
Core PPI, which excludes more volatile categories like food and energy, told a milder story. It rose 0.2%, actually beating expectations of a 0.3% increase.
Bitcoin was already sliding before the data
Bitcoin had already been retreating ahead of the report. The coin dropped from over $80,400 to $78,400 in anticipation of this week's economic events. Once the PPI print went live, however, the decline accelerated sharply, and bitcoin fell by $1,000 within minutes of the release.
More inflation data and a Fed decision are still ahead
The PPI is only the first of several catalysts due this week. The Consumer Price Index for August is set for release the following day, the last inflation print before the Federal Reserve's meeting on September 15-16. The central bank will announce its rate hike decision on September 16, and odds of a hike have risen sharply over the past ten days.
Source: CryptoPotato
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