Bitcoin dropped beneath the $80,000 level on Wednesday, May 13. The dip came following stronger than expected U.S. Producer Inflation Index (PPI) data released on the same day.
Bitcoin Reacts As US PPI Rises To Highest Level In Years
According to data from Department of Labor, that U.S. core producer price index (PPI) rose by 1% month-on-month in April 2026, excluding food and energy prices. The figure exceeded expectations of 0.3% in the market.
It also represents the biggest monthly rise since March 2022. Moreover, there was an upward revision to March 2026 data to 0.2%
The Core PPI measure was up 5.2% in April from a year ago, after climbing 4% the previous month. It greatly surpassed analyst estimates of 4.3%. The hotter inflation data was seen as raising the risk of the Federal Reserve keeping interest rates high. In case of such a hawkish stance, risk-on assets like Bitcoin and other cryptocurrencies tend to suffer.
According to market data, Bitcoin was one of the biggest losers amid the macro developments. It fell below $80,000, reaching $79,046.95 at press time during the trading session today.
The BTC price barely is holding onto the $79,000 level as it fell 1.52% in the last 24 hours and its market cap dropped to $1.58 trillion. Overall, the crypto market got weaker as traders reviewed expectations for monetary policy.
Fed Rate Cut Odds Decline
The Federal Reserve leadership news also had an impact on markets. The U.S. Senate voted 49-44 to invoke cloture for Kevin Warsh’s nomination to serve as a member of the Federal Reserve Board of Governors. He is expected to serve a 14-year term beginning Feb. 2026.
Final Senate confirmation hearings likely will proceed later this week, as Republicans are expected to approve the nomination. Further uncertainty over the future of monetary policy has persisted with news regarding Warsh coming nearer to replacing Jerome Powell as Fed Chair.
Amid this backdrop, market participants lowered their forecast of Fed rate cuts in 2026 and 2027. CME FedWatch data has now shown an increased chance of a rate pause in the current 3.50%-3.75% target range.
In addition, the market eyes a higher chance of a potential rate hike in the coming year. Rate hikes could affect Bitcoin’s value as it would lower the liquidity in the economy due to higher interest rates for borrowing.
