The United States Producer Price Index (PPI) for September 2026 jumped 1.3% month-over-month (MoM) and 6.3% year-over-year (YoY). This annual pace marks the sharpest rise since December 2022, beating market consensus by 100 basis points. The crypto market reacted swiftly to the news. Bitcoin dropped more than 3.6% in 24 hours, sliding past the psychological $80,000 level to touch a daily low of $80,443, and briefly dipping below $80,000 before rebounding to around $81,000. What immediately weighed on market sentiment was the primary driver behind the producer inflation surge: energy.
Energy Surge Drives Factory Costs
The US Bureau of Labor Statistics (BLS) reported that final demand goods prices jumped 2.6% MoM, recording the largest monthly increase since December 2009. A 10.8% surge in energy prices and a 20.3% spike in gasoline propelled the jump in the goods component, following a rally in Brent crude oil prices toward $104 per barrel.
The PPI release came just one day after the US Consumer Price Index (CPI) registered at 3.7% YoY. The two consecutive inflation reports reinforced investor concerns that the Fed may raise its benchmark interest rate again at its October 27-28, 2026 meeting. In the derivatives market, the CME FedWatch tool showed the probability of a 25-basis-point Fed rate hike in October climbing to between 30% and 34%.
Why the Bond Market Took a Different Turn
Amid the pressure weighing on risk assets, the US government debt market moved in the opposite direction. The 10-year US Treasury yield dropped near 3%, hitting its lowest level since September 23.
The decline in yields points to a decoupling of the bond market from short-term macroeconomic data. Investor demand for Treasuries held firm as market participants began shifting their focus to the widening US federal budget deficit, rather than simply reacting to Fed rate projections.
Two Support Lines on the Weekly Chart
The macro-driven correction brought Bitcoin to test its long-term moving average trendlines. On the weekly chart, the 50-week exponential moving average (EMA) sits at $78,459, with the 21-week EMA at $76,144 serving as the next technical support level.
For Bitcoin holders, the brief dip below $80,000 serves as a reminder that crypto assets remain sensitive to expectations of monetary tightening. Until the Fed concludes its policy meeting in late October, the weekly EMA range between $76,000 and $78,000 will be a crucial test of whether buying interest can withstand further selling pressure.
Reported via Cointelegraph.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
