Bitcoin pinned near critical support as hot PPI spike compounds rate hike fears: analysts

Bitcoin briefly slipped below $80,000 on Wednesday as April core producer prices surged 1% month-over-month in the steepest reading since March 2022, dealing a second consecutive blow to Federal Reserve rate-cut expectations.

Core PPI blew past the 0.3% consensus forecast and an upwardly revised 0.2% reading in March, according to the U.S. Bureau of Labor Statistics’ report. Year-over-year, core producer prices climbed 5.2% in April, up from 4% the prior month and above the 4.3% estimate. Headline PPI came in at 6.0% year-over-year against a 4.9% forecast.

April CPI, released the prior session, had already rattled sentiment. Headline inflation ran at 3.8% annually, with core CPI at 2.8% year-over-year — a tick above the 2.7% consensus — briefly pushing 10-year Treasury yields toward 4.46%.

Following the PPI release, bitcoin (BTC) oscillated between $79,700 and $80,200, a band that traders are treating as critical near-term support.

“The fact that Bitcoin is holding the $80k support level here is crucial and speaks of the strength of this asset,” said Matt Mena, senior crypto research strategist at 21Shares. A break below $80,000 would likely trigger a retest of $78,000, with $75,000 as the next defensive zone if that fails, he added.

ETF flows had already turned negative ahead of the data.

Bitcoin spot ETFs recorded $233 million in net outflows on May 12, led by Fidelity’s FBTC at $86.13 million, according to SoSoValue. Ethereum spot ETFs shed $131 million in the same session, with BlackRock’s ETHA accounting for $102 million.

Simon-Peter Massabni, head of business development at XS.com, also identified erratic ETF flow patterns as a structural vulnerability. A $622.75 million inflow last week reversed into $233.25 million in outflows on Monday, suggesting capital is chasing short-term momentum rather than building durable exposure.

Macro jitters resurface

With that beat, Back-to-back inflation prints have sharpened rate-hike bets. CME FedWatch data now imply roughly a 30% chance the Federal Reserve raises rates by year-end, up from 15% a week earlier.

QCP Group’s May 13 market note argued that the CPI overshoot was less alarming in its details than on the surface. Analysts at the firm noted that shelter costs, particularly owners’ equivalent rent, drove much of the upside, and likely reflected delayed adjustments following the October 2025 BLS shutdown rather than a renewed price impulse.

The firmer read on supercore, core services ex-housing, is the stickier concern, QCP wrote. That measure accelerated for a third straight month, keeping the market focused on demand and wage-sensitive inflation.

China PPI turning positive for the first time in 41 months adds pressure from a different direction. The global goods disinflation tailwind that helped suppress prices through 2024 is fading, the firm added.

Following the latest inflation data, BTC perpetual open interest fell 7% from a week ago to $36.8 billion, consistent with deleveraging on the move below $80,000, Nexo analysts wrote in a note.

Funding sits at 3.4% annualized after averaging slightly negative over the prior 30 days, pointing to balanced rather than crowded positioning. Bitcoin implied volatility compressed alongside spot, with the term structure sitting in contango across all tenors: one-week at 35.4%, one-month at 36.2%, three-month at 38.7%, six-month at 41.8%.

A clean break above $82,500 or below $79,500 would likely reset both volatility and positioning, according to the dispatch.

Broad view

Mena placed the PPI print within a broader catalyst stack that could still shift bitcoin’s trajectory.

The Clarity Act Senate markup set for Thursday carries roughly 65% approval odds on Polymarket. Six straight weeks of cumulative ETF inflows exceeding $3.5 billion remain on the ledger. Trump’s Beijing visit — beginning Wednesday — is the main macro wildcard, with Mena arguing a constructive summit outcome would meaningfully ease the macro overhang and provide cover for a push through $82,000 resistance.

However, two-year Treasury yields sat near 4% heading into Wednesday’s session, with the bond market pricing the next Fed move as increasingly likely to be a hike rather than a cut. Such an outcome may weigh heavily on bitcoin and risk assets, multiple analysts opined.

Bitcoin last traded near $79,700, according to The Block’s price page.

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