Bitcoin Slides as Producer Inflation Data Stirs Rate Hike Fears

The U.S. Bureau of Labor Statistics reported a 1.3% rise in the producer price index for September, pushing annual wholesale inflation to 6.3%. Energy costs served as the primary catalyst, accounting for over 80% of the increase in final-demand goods. Gasoline prices alone surged 20.3%, while transportation and warehousing services also contributed to the broader inflationary pressure.

This data arrives on the heels of a consumer inflation report showing a 3.7% annual increase, leaving investors increasingly wary of the Fed's next move. CME FedWatch data currently assigns a 34% probability to a quarter-point rate hike in October. Bitcoin, which had struggled to break through the $84,000 resistance level earlier in the week, dropped to a 24-hour low of $80,443 in response to the news. The asset now sits below its 50-day moving average, marking a distinct shift from the market optimism seen in July when softer inflation readings fueled a rally.