TradingKey - US August PPI Surges! Expectations of Consecutive Fed Rate Hikes Resurface, Sparking Crypto Bloodbath as BTC Plunges Below $77,000.
On September 11, cryptocurrencies extended their losses, with major coins plunging across the board. Among them, Bitcoin (BTC) fell 2%, dropping below the $77,000 mark; Ethereum (ETH) and Binance Coin (BNB) were relatively resilient, down only about 1%; Ripple (XRP) fell nearly 4%, while ZEC plummeted nearly 12%.
The collective plunge in cryptocurrencies once again dealt a heavy blow to bulls. Among them, the Sentiment Index continued its pullback to 67, and although it remained in a state of greed, it hit its lowest level in the past month. According to Coinglass data, liquidations across the network reached $456 million over the past 24 hours, with long positions accounting for as much as $360 million, or 78%.
Yesterday, the US reported that the August PPI rose 5.4% year-over-year, higher than the expected 5.3% and July's revised 4.8%; the month-over-month rate was 0.4%. Core PPI, which excludes food and energy, rose to 4.6% year-over-year. Following the data release, the market's expected probability of a 25-basis-point rate hike at the Fed's September FOMC meeting rose significantly, with the CME FedWatch tool showing the probability climbing above 70%.
In addition, driven by the dual stimuli of PPI inflation concerns and crude oil prices surging above $100 per barrel, the US 10-year Treasury yield rose to 4.8184%, reaching its highest level since November 2023, further weighing on the valuations of non-yielding and high-risk assets, including cryptocurrencies.
Squeezed by high inflation concerns and soaring US Treasury yields, the cryptocurrency market experienced massive liquidations, with Bitcoin weakening further, though it has not yet broken below its early-September low of $96,000. Moving forward, attention turns to the upcoming CPI data. If CPI also comes in higher than expected, it will further confirm sticky inflation and could trigger a new drop toward $70,000; conversely, if CPI shows signs of cooling, it could spark a short-term rebound.
Bitcoin price chart, source: TradingView
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