Bitcoin briefly fell below $71,000 after the US Bureau of Labor Statistics reported wholesale inflation that came in hotter than expected. Before 7:30 a.m. EST, BTC had been trading above $74,000. Selling accelerated soon after, sending the price down to an intraday low of $70,882.
By 1:42 p.m. EST, bitcoin had recovered modestly to around $71,500, though it was still down 3.8% over 24 hours. The move marked a sharp reversal from Tuesday’s peak of $76,013. Market capitalization also contracted from $1.48 trillion to about $1.43 trillion.
PPI shock shifts attention back to inflation and rates
The immediate trigger was February’s Producer Price Index report. On a month-over-month basis, PPI rose from 0.5% to 0.7%, while economists had expected a cooler reading of 0.3%. That 0.4 percentage point gap forced a fast repricing across risk markets.
The report also challenged the recent view that geopolitical stress in the Middle East was helping bitcoin trade more like a safe-haven asset. After the inflation release, macro data took control of the narrative again. Traders moved from talking about possible rate cuts to considering a firmer Federal Reserve stance, even as the Federal Open Market Committee had broadly been expected to keep rates in the 3.5% to 3.75% range.
Long squeeze hits leveraged crypto positions
The sell-off triggered a long squeeze across bitcoin derivatives. Coinglass data showed that more than $108 million in bitcoin long positions were liquidated in just 12 hours. That was a notable turn after Monday and Tuesday, when short positions had accounted for most forced exits.
Across the wider crypto market, total liquidations reached $402 million at the time of writing. Long liquidations made up nearly $339 million of that figure, with the rest attributed to short positions. The concentration of liquidations added to the speed of bitcoin’s drop from recent highs.
Bitunix points to energy pricing and liquidity conditions
Analysts at Bitunix said markets are dealing with two structural shocks at once: a full repricing of global energy supply chains and weakening confidence in traditional policy responses. In their view, the Federal Reserve’s decision to remain on hold reflects the difficulty of balancing persistent energy-driven inflation against softer labor conditions.
The firm also argued that US use of “oil loans” from strategic reserves only shifts near-term supply pressure into future demand obligations. As tensions in the Middle East affect energy infrastructure and shipping routes, supply risks are being reflected in forward curves and physical pricing.
For bitcoin, Bitunix said the pricing framework may be changing. If elevated energy prices keep suppressing expectations for monetary easing, BTC may trade more like a risk asset than a hedge. If liquidity conditions return, the current high-range consolidation could become a base for expansion. In the near term, the firm highlighted short liquidity above $75,000 and the $72,800 level as key areas to watch.