Bitcoin Price Dips Below $80K Amid Stronger-Than-Expected US Inflation

The latest economic indicators from the US have sent shockwaves through the cryptocurrency market, with Bitcoin's price falling below the crucial $80,000 level. The US Producer Price Index (PPI) report showed a significant increase in inflation, exceeding market expectations and adding pressure to crypto markets already sensitive to inflation data.

The PPI report revealed that annual PPI rose to 6.0% in April, while core PPI, which excludes food and energy, increased by 1% month-over-month - its largest monthly rise since March 2022. These numbers have sparked concerns about the potential for higher interest rates, making cash and government bonds more attractive compared to risk assets like Bitcoin.

Traders have responded to the inflation data by reducing their leveraged exposure in Bitcoin derivatives, with open interest falling by around $1.25 billion across major exchanges such as Binance, Gate.io, Bybit, and OKX. This indicates that traders are taking a more defensive stance, likely due to the increased risk of rate hikes.

However, some spot-market data suggests that there may be renewed buy-side activity in Bitcoin. Coinbase spot volume delta has turned positive over the past two weeks, indicating renewed interest from U.S.-based and institutional buyers. If this trend continues, it could help absorb selling pressure near current levels.