Bitcoin (BTC) hovered around $68,700 after opening on Wall Street Friday, recovering from an earlier decline to around $67,500.
Key points:
- Bitcoin failed to recapture the $70,000 mark after hitting around $67,500 on Friday, its lowest level since mid-August.
- The U.S. producer price index (PPI) rose 6.5% year-on-year in October, 0.1 percentage points below expectations but still the strongest increase since November 2022.
- Rekt Capital warned that a weekly close below $73,000 could mark Bitcoin’s third break below this support level in 2026.
US PPI posts largest annual increase since Q4 2022
Data from TradingView showed BTC/USD fell 4% on the day after recovering from a roughly 12-week low at $67,500.
BTC/USD one-hour chart. Source: Cointelegraph/TradingView
The U.S. producer price index, which measures changes in domestic producers’ prices for their goods and services, rose 0.3% month-on-month and 6.5% year-on-year in October. Both readings were 0.1 percentage points below market expectations, but the annual increase was the largest since November 2022.
“At the peak of the rise in final demand prices in October, the index for final demand goods rose 0.5 percent. Prices for final demand services rose 0.2 percent,” according to the US Bureau of Labor Statistics (BLS). reported Friday.
Percent change in US PPI per month. Source: BLS
Heading into the US trading session, stocks showed little sign of relief and traders remained silent Analysis of developments surrounding Nvidia after its co-founder and CEO Jensen Huang resigned on Thursday.
The S&P 500 was down 1.2% at the time of writing, while the tech-heavy Nasdaq Composite Index was down 1.5%.
One-day chart of the Nasdaq Composite Index. Source: Cointelegraph/TradingView
The PPI release caused markets to slightly adjust their expectations for interest rate hikes from the Federal Reserve. The probability of a minimal 25 basis point hike at the Fed’s December meeting rose to 89.7% from 85.4% on Thursday, while the probability of a larger 50 basis point hike fell to 10.3% from 14.5%, according to CME Group data FedWatch tool.
Probability comparison of Fed target interest rates for the December FOMC meeting. Source: CME Group
Economist Robin Brooks described a 25 basis point increase in December as “all but inevitable.” However, he spoke out against a steeper increase, saying it would be ineffective in view of this current inflation drivers: the rise in oil prices due to the US-Iran war and a possible long-term acceleration in underlying inflation.
“If high inflation is about the Strait of Hormuz and oil, 75 basis points will do nothing about it. If the problem is that the pace of underlying inflation has increased, then 75 basis points is far too paltry to control that,” he wrote.
Related: Stablecoin supply falls by $14.2 billion, the largest 30-day decline since June 2022
Bitcoin expects a repeat of the collapse that preceded the $60,000 drop
Crypto trader and analyst Rekt Capital warned that a BTC close below $73,000 on Sunday would mark a breakdown of support seen as early as 2026.
“Last week’s weekly candle closed below 3 weekly levels,” he said wrote on X, related to $75,000, $76,800 and $78,300. “This weekly candle is likely to do something similar. This is evidence that sell-side momentum is still increasing and bears are in control.”
After each of the two previous collapses, Bitcoin fell to around $60,000.
BTC/USD one-week chart. Source: Rekt Capital on X.com
At $68,700, BTC/USD is down 17.7% in the fourth quarter and 11.2% month to date. Quarterly performance is currently Bitcoin’s second-worst on record, data shows CoinGlass confirmed.
BTC/USD quarterly returns. Source: CoinGlass
