as the hot PPI data fuels stagflation fears
TLDR:
Core IBP rose 1% month-over-month, far surpassing the forecast of 0.2%, indicating persistent inflation.
Binance saw $853 million in BTC sell flows in just one hour, accounting for 91% of the total market sell-off.
The expectations for a Fed rate cut in 2026 have been fully priced in after the hotter-than-expected PPI print.
Bitcoin is once again testing the support zone of $78K-$79K, with a recovery to $80K needed to target the resistance at $82K.
Bitcoin came under significant selling pressure after hotter-than-expected PPI data shook the markets. The figures pointed to a deepening inflation across the U.S. economy.
Investors responded by trimming exposure to riskier assets. During the first hour of trading, BTC absorbed almost $853 million in sell flows on Binance. The broader macroeconomic context continues to weigh on alternative assets like Bitcoin.
PPI shock sends Bitcoin tumbling at market open.
The latest Producer Price Index report offered a remarkable surprise to the markets. The core PPI, which excludes food and energy, rose by 1% month-over-month.
That sharply compared to the previous reading of just 0.2%. Analysts had forecast a much more modest increase, making the miss hard to ignore.
The data showed that tariffs and geopolitical tensions are fueling the entire supply chain. Cost pressures are no longer confined to specific sectors of the economy.
Instead, they seem to be broadly extending, keeping inflation persistently high. This paints a more complicated picture for policymakers moving forward.
Markets quickly revalued their expectations for Federal Reserve action. From now on, traders no longer anticipate any rate cuts through 2026.
That shift in sentiment pushed some investors to cut exposure to risk assets at the open. Bitcoin took the brunt of that repositioning early in the session.
According to on-chain analyst Darkfost, Binance alone accounted for 91% of total sell flows during that first hour. The $853 million in sell-side flows from a single exchange was notable.
Throughout the session, BTC ended down 1.5%. Meanwhile, the S&P 500 and Nasdaq Composite closed at all-time highs.
Bitcoin looks to reclaim $80,000 as the support zone weakens.
Despite the heavy sell-off, Bitcoin managed to find an anchor near a familiar demand area. The $78,000 to $79,000 zone has repeatedly acted as short-term support on the daily chart.
Buyers stepped in once again to defend that level. The bounce suggested that underlying demand hadn't completely collapsed.
Analyst Ted Pillows pointed out the recovery attempt, noting renewed institutional interest as a contributing factor. Michael Saylor's continued accumulation of Bitcoin helped restore some confidence across the market.
$BTC retraced yesterday to the support zone of $78,000-$79,000.
It's now showing a bit of a bounce with Saylor's buy orders.
If Bitcoin recovers the $80,000 level, it could rally back up towards the $82,000 zone again. pic.twitter.com/aoYg5acbtl
His buying activity has consistently served as a sentiment anchor during volatility periods. That narrative seems to be playing a role again here.
Price action is now hovering just below the psychological resistance level of $80,000. A clear breakout above that mark could open the path towards the $81,500-$82,000 range.
That zone aligns with the next visible resistance cluster on the chart. A move beyond could focus on the $84,000 area.
However, failing to hold above $78,000 carries its own risks. A breakdown of that support could see Bitcoin retrace to $76,000 before any recovery attempt. The upcoming sessions will likely determine the short-term direction for BTC's price.
Bitcoin faces a sell-off of $853 million as hot PPI data fuels stagflation fears, first appearing on Blockonomi.