U.S. PPI exceeds expectations, Bitcoin falls;30-year U.S. bond yields hit 19-year highs

Bitcoin fell below the $77,000 mark, macro pressure intensified

Bitcoin prices fell below $77,000 at the opening of Wall Street on Thursday, dragged down mainly by a sharp reversal in broader risk sentiment. As the latest U.S. inflation data comes out and soaring oil prices push yields higher, macro pressures have intensified, tightening market conditions that typically support non-interest-earning assets such as Bitcoin.

Market pricing also reflects new concerns about the Fed's policies. Although the Treasury Department implemented an intensified debt repurchase operation and bought back $6 billion in treasury bonds, the yield on the 30-year Treasury bond climbed to 5.353%, the highest level since June 2007.

Key Points

• Bitcoin fell below US$77,000, coinciding with a higher-than-expected U.S. producer price index (PPI), leading to a weakening of risky assets.
• The U.S. PPI rose 5.4% year-on-year in August, reinforcing expectations of tightening financial conditions.
• WTI crude oil exceeded US$100 per barrel for the first time since May 21, raising the market's sensitivity to inflation.
• Despite a $6 billion Treasury repurchase operation, long-term U.S. yields rose, with the 30-year yield reaching 5.353%.
• CME Group's Fed Observation Tool shows that the market expects the probability of a 0.25 percentage point rate hike by the Fed at the September 16 meeting to rise to 69.8%.

High inflation and oil prices impact on risk appetite in the crypto market

According to TradingView data, Bitcoin/USD fell by about 2% on the day as the stock market weakened and macro variables tightened. While short-term trading in Bitcoin is often driven by liquidity and overall risk appetite, the combination of catalysts that emerged Thursday cannot be ignored: rising inflation expectations and a new round of energy-driven price pressures.

Earlier in the trading session, the escalating situation in the Middle East pushed crude oil prices higher. WTI crude exceeded $100 per barrel for the first time since May 21, while Brent crude exceeded $105, close to a 16-week high. Rising energy prices can quickly pass on to inflation expectations, which in turn affect bond yields and interest rate forecasts-key inputs for investors to rotate between growth and defensive assets.

This link is particularly relevant for crypto markets, as expectations of higher real yields and tighter central bank monetary policy often reduce the relative attractiveness of risky assets. Due to the lack of cash flow or coupons to offset changes in discount rates, Bitcoin is often traded as a high-beta proxy indicator of global liquidity conditions.

Yields continue to rise despite Treasury intervention

The momentum of the bond market is at the heart of this risk aversion. The U.S. 30-year yield rose to 5.353%, the first low since June 2007; the 10-year yield hit its highest level since November 2023, at 4.924%. Notably, this trend occurred after the Treasury Department implemented the first phase of its additional debt repurchase operation, which bought back $6 billion worth of treasury bonds on Wednesday.

The contrast is significant: if interventions fail to relieve pressure on yields, investors may interpret it as weakening long-term risk demand, or inflation and interest rate expectations dominate the narrative. In other words, the "help" from repurchase is offset by macro forces.

Transaction-oriented comments echoed this view. Kobeissi Letter warned on platform X that "the bond market is actually against the U.S. Treasury."

PPI data strengthens the Federal Reserve's expectation of raising interest rates, and the market turns to CPI

U.S. inflation data adds another layer of pressure. The producer price index (PPI) rose 5.4% year-on-year in August, exceeding expectations by 0.1 percentage points. The U.S. Bureau of Labor Statistics said the overall PPI data for July was also raised.

In a report released by the Bureau of Labor Statistics, the agency noted that the final demand index excluding food, energy and trade services rose 0.3% in August, after rising 0.4% in July. According to the same official press release, the indicator's price rose 4.7% in the 12 months to August.

The market responded quickly. CME Group's Fed Observation tool shows that as of the time of writing, the market expects the Fed to raise interest rates by 0.25 percentage points at the September 16 meeting to 69.8%, from 61.2% the previous day. The shift highlights how sensitive risky assets are as inflation data continues to push central banks towards further tightening.

Previous reports have pointed out that after stronger-than-expected non-farm payrolls data pulled Bitcoin back below $80,000, the market was increasingly worried about the Federal Reserve's policies. Thursday's PPI data further exacerbated this tightening narrative rather than alleviated it.

Looking forward to the next inflation report and central bank actions

Another important U.S. inflation data will be released on Friday: the consumer price index (CPI). As previously reported, the CPI is expected to be the last major inflation data release before the Federal Reserve's interest rate decision. This is crucial for Bitcoin traders and investors, because the CPI will either verify market fears that "high interest rates will last longer" or bring enough cooling effect to cause expectations to turn back towards easing.

Meanwhile, policy tightening is not limited to the United States. On Thursday, the European Central Bank approved a 0.25 percentage point rate hike, its second such move in 2026. Although the ECB's interest rate actions do not directly determine the U.S. Federal Reserve's policy, additional tightening outside the United States can strengthen the global "reduced liquidity" background, which often puts pressure on long-term, risk-sensitive markets.

As a result, Bitcoin's fall below $77,000 does not seem like a single-currency story, but rather the result of broader macro repricing: oil-driven inflation concerns, accelerating bond yields, and what investors increasingly see as a restrictive path.

Looking ahead, the main uncertainty facing cryptocurrencies is whether the next CPI reading will be enough to cool the inflation picture and stabilize yields-or whether oil and producer price momentum will continue to maintain market expectations for a Fed rate hike. Until then, Bitcoin will likely continue to remain highly sensitive to macro headlines rather than just targeting specific catalysts in the crypto space.