Sophia Bennett
Crypto Analyst
The number that nobody wanted to see arrived on Wednesday, and it hit crypto hard. A hotter‑than‑expected US inflation reading wiped out weeks of carefully built bullish momentum in a matter of hours, sending Bitcoin back below $80,000 and triggering one of the largest liquidation events in recent months.
Bitcoin slipped from the low $81,000 area to a session low near $79,557 after the April US Producer Price Index came in far above expectations. Final demand PPI rose 1.4% month over month, well above the 0.5% consensus. The annual rate accelerated to 6.0% from 4.3%, the highest level since 2022.
For a market that had been quietly hoping for rate cuts, this was a gut punch.
How Bad the Inflation Data Actually Was
The PPI number did not just miss, it blew past estimates on every measure.
Core PPI rose 1.0% month over month against expectations for 0.3%, while core PPI year over year moved to 5.2% from 4.0%.
The data has market participants quickly pricing in Federal Reserve rate hikes, a massive change from weeks ago when the question was how often the Fed would be cutting rates in 2026. According to CME FedWatch, markets are seeing more than a 35% chance of one or more rate hikes this year.
Rate hike bets and risk assets do not mix well. The market repriced immediately.
$400 Million in Liquidations Wiped Out
The damage in derivatives markets was fast and severe.
Liquidations surged 68% to nearly $400 million, with the vast majority coming from long positions. 24‑hour BTC liquidations totalled $117 million, of which $102 million were longs, reinforcing the idea that market participants were heavily positioned for an upside breakout above the 200‑day moving average, which sits just above $82,000.
The 24‑hour cumulative volume delta turned negative, implying that sell orders were dominating buy limit orders across major venues. Everyone who was leaning long above $80,000 got stopped out at once.
ETFs See Their Worst Outflows Since January
The institutional picture was equally painful.
The 12 spot Bitcoin ETFs in the US recorded roughly $635 million in net outflows on May 13, the largest daily withdrawal since January. BlackRock's IBIT led losses with $284.69 million in outflows, followed by Ark 21Shares' ARKB with $177.10 million and Fidelity's FBTC with $133.22 million. None of the remaining Bitcoin ETFs recorded inflows on the day.
Crypto Stocks Got Dragged Down Too
The selloff did not stay contained to digital assets.
Coinbase and Circle both dropped more than 6%, while Strategy and Bitmine slid nearly 7%. Data centre and AI infrastructure‑linked names, many of them former bitcoin miners, led declines, with CleanSpark, Keel Infrastructure, and MARA Holdings among the hardest hit. The Nasdaq fell over 2%, on track for its worst session since late March.
WTI crude futures remained above $101 per barrel as the US intensified pressure on Iran through fresh sanctions targeting entities involved in Iranian oil sales to China, adding an additional layer of inflationary pressure that kept risk sentiment suppressed through the session.
What Needs to Happen for Recovery
The path back is straightforward but fragile. Bitcoin needs to recover $80,000 while the S&P 500 stabilises and Treasury yields stop rising. Until that sequence appears, the PPI shock remains the active driver and Bitcoin's intraday structure stays broken.
Bitcoin's open interest edged slightly higher to 750K BTC from 745K BTC, suggesting capital is still flowing into derivatives markets, even if the immediate direction favours the sellers.
The bulls have not disappeared. But until inflation cools or the Fed blinks, every rally faces the same ceiling, and Wednesday proved just how quickly that ceiling can come down.
