The U.S. Bureau of Labor Statistics reported Wednesday that the Producer Price Index (PPI) for April 2026 rose 1.4% month-over-month, pushing the annual rate to 6% — well above expectations. The hot wholesale inflation data sent shockwaves through crypto markets, with Bitcoin dropping below $79,000 for the first time since May 4. The largest cryptocurrency briefly touched $78,704 before recovering to trade near $79,000 at the time of writing (13:08 ET May 13). Still, BTC was down 1% over 24 hours, and its market cap slipped under $1.6 trillion.
Macro Shockwaves: CPI, PPI, and Geopolitical Tensions
Investors were already on edge after the Consumer Price Index (CPI) release showed inflation staying sticky. The PPI report confirmed that wholesale price pressures are accelerating across the board, driven primarily by surging energy costs that are now spilling into housing, services, and broader consumer categories. “Despite two years of tightening, U.S. inflation has not yet returned to a stable trajectory,” a Bitunix analyst noted. Adding to the uncertainty, geopolitical tensions between the U.S. and Iran escalated after President Trump described the ceasefire as being on “life support.” The twin shocks — macro data and geopolitics — hit risk assets hard.
Liquidation Data: $304 Million in Longs Wiped Out
According to Coinglass, the downturn triggered a cascade of forced liquidations. Bitcoin longs accounted for $94 million of the total, up $37 million from the previous day. Short liquidations also doubled compared to Tuesday. Across all crypto, $304 million in long positions were liquidated, while short liquidations totaled $71 million — a clear sign that leveraged bulls were caught off guard.
Fed Outlook Shifts: Rate Pause Now Certain, Hikes Possible
Following the PPI data, prediction markets Polymarket and Kalshi both showed near-100% probability that the Fed will hold rates steady in June. Boston Fed President Susan Collins warned that “monetary tightening” may be necessary to ensure inflation returns to 2% in a timely manner. For Bitcoin and other risk-on assets, any further tightening would cap upside potential. Traders now await the May FOMC minutes and more Fed commentary to gauge the next move.
Prior to the PPI shock, Bitcoin had rallied to a local high of $82,145 on May 11, but began declining after reports that the Trump administration rejected an Iranian peace proposal. Now, with both inflation data and geopolitical uncertainty weighing on sentiment, the crypto market faces a critical test.