Bitcoin fell more than 3.6% on Thursday after new US data showed that wholesale prices rose sharply in September, raising concerns about inflation and the Federal Reserve’s next interest rate decision. Bitcoin was trading at around $81,500 following the release of the inflation data.
The cryptocurrency also fell below its 50-day moving average, a level traders use to understand price trends. Bitcoin recorded a 24-hour low of $80,443, according to the same report.
The US Bureau of Labor Statistics (BLS) reported on October 15 that the Producer Price Index (PPI), which measures changes in prices received by producers for their goods and services, increased 1.3% in September from August. This was much faster than the revised 0.5% increase recorded in the previous month, according to the BLS.
Deep Dive
Why did Bitcoin fall after the September US wholesale inflation report?
What drove the 1.3% rise in US wholesale prices in September?
What would Bitcoin need to do to make a move toward $93,000 possible?
On a yearly basis, US wholesale prices rose 6.3% in September, marking the fastest increase since December 2022, the BLS reported. The latest figures added to concerns about rising prices in the US economy.
The wholesale inflation report came a day after the release of US consumer inflation data. The two reports gave investors fresh information about rising prices ahead of the Federal Reserve's October policy meeting.
{{/usCountry}}The wholesale inflation report came a day after the release of US consumer inflation data. The two reports gave investors fresh information about rising prices ahead of the Federal Reserve's October policy meeting.
{{/usCountry}}Also read: US chip stocks fall: Nvidia drops 2%, AMD 4% as inflation and AI debt worries deepen sell-off
Bitcoin fails to break above $84,000
Bitcoin had approached $83,900 during Asian trading on October 14 before falling towards $83,500. The cryptocurrency failed to move above the $84,000 level, which analysts were watching as an important price barrier.
Analyst Ali Martinez identified $84,000 as a potential breakout level on Bitcoin's four-hour price chart, according to the earlier crypto.news report. He suggested that Bitcoin could move towards $93,000 if it closed above that resistance level and continued to rise.
However, the $93,000 level was a conditional target, not a confirmed prediction. Bitcoin would need to break above the $84,000 resistance level and maintain its upward movement for that potential price target to become relevant, the report said.
The earlier report also cited New York Federal Reserve President John Williams' October 13 remarks on interest rates. Williams said another rate increase could be appropriate before the end of 2026, but economic conditions did not point to a need for further increases in 2027.
Energy prices push US wholesale inflation higher
Energy prices were the biggest driver of September's increase in wholesale goods prices. The BLS reported that energy prices jumped 10.8%, accounting for more than 80% of the overall increase in prices for final-demand goods.
Gasoline prices rose 20.3% in September, according to the BLS. Prices also increased for diesel, jet fuel, residential electricity and crude petroleum, adding to pressure on wholesale costs.
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Prices for final-demand goods increased 2.6% during the month, marking the largest monthly rise since the series began in December 2009, the BLS reported.
Food prices increased 1.2% in September, while prices for goods excluding food and energy rose 0.3%, according to the BLS. This showed that wholesale inflation increased across several categories, although energy remained the main contributor to the monthly rise.
Prices for services also increased in September. The BLS reported a 0.8% monthly rise in final-demand services prices.
Nearly half of the increase in services prices came from trade-service margins, which rose 1.4%, according to the BLS. Transportation and warehousing services also became more expensive during the month.
A separate measure of wholesale inflation that excludes food, energy and trade services increased 0.5% in September. The same measure rose 5% compared with a year earlier, according to the BLS.
Bitcoin previously gained after softer inflation data
Bitcoin had reacted differently to inflation data in July, when softer wholesale price figures supported a price recovery. According to an earlier crypto.news report published on July 15, Bitcoin climbed above $65,000 after producer inflation for June came in below expectations.
The July report said headline producer prices fell 0.3% month-on-month, while core PPI, which excludes food and energy, increased 0.2%. The core increase was below economists' expectations of 0.3%, according to the same report.
The softer inflation figures also changed expectations for the Federal Reserve's July rate decision. The July report's snapshot of the CME FedWatch tool showed that the probability of a rate increase fell to 10.2%.
That probability had been around 16% after the previous consumer inflation report and above 30% a week earlier, according to the July crypto.news report. The figures illustrated how changes in inflation data can influence expectations for interest rates and market sentiment.
October Fed rate decision remains uncertain
US consumer inflation also remained a concern ahead of the Federal Reserve's October meeting. Reuters reported on October 14 that annual consumer inflation reached 3.7%, while core inflation stood at 2.6%, above the 2.5% forecast in its economist poll.
Martin Beck, chief economist at PPHC, said persistent inflation remained a concern, according to Reuters. However, he noted that weaker employment data and fragile consumer sentiment could give the Federal Reserve a reason to keep interest rates unchanged in October.
Market expectations remained divided after the consumer and producer inflation reports. The initial market report's CME FedWatch snapshot assigned a 34% probability to a quarter-percentage-point rate increase in October and a 66% probability to rates remaining unchanged.
Reuters separately reported that markets saw roughly a 30% chance of a rate increase. The Federal Reserve's next policy meeting was scheduled for October 27–28.
The Fed's benchmark interest rate range stood at 3.75%–4% after the central bank cut rates by a quarter percentage point in September, Reuters reported. Investors were watching the next decision closely because interest rates can influence borrowing costs, investment decisions and demand for riskier assets such as Bitcoin.
Despite the latest inflation readings, US Treasury yields fell and the dollar weakened on Thursday. These market movements showed that investors were also responding to other economic factors rather than inflation data alone.
US Bitcoin ETF inflows slow before inflation reports
Investment flows into US-listed Bitcoin exchange-traded funds (ETFs) had already slowed before the latest inflation reports. An October 3 crypto.news report, citing provisional figures from Farside Investors, said the funds attracted $82.9 million between September 28 and October 2.
The reported inflows were much lower than the $2.39 billion recorded in the previous week, according to the same crypto.news report. However, the $82.9 million total was provisional because BlackRock's Friday figure was still pending when the data was checked.
Daily figures showed that Bitcoin ETFs received $31 million on Monday and $66.2 million on Tuesday, according to Farside Investors' figures cited by crypto.news. The funds then recorded $148.7 million in withdrawals on Wednesday.
ETF flows turned positive again on Thursday, with $102.7 million entering the funds. Friday's reported inflows stood at $31.7 million, although the total remained incomplete because BlackRock's entry was outstanding, the report said.
At the individual fund level, Fidelity's FBTC recorded $167.9 million in weekly withdrawals, while Bitwise's BITB saw $38.6 million leave the fund. Grayscale's GBTC also recorded $54.6 million in withdrawals, according to the October 3 crypto.news report.
BlackRock's IBIT attracted $292 million between Monday and Thursday during the same reporting period, according to the report's historical snapshot. These figures showed that Bitcoin ETF flows varied significantly across individual funds, even as overall weekly inflows slowed.
The latest inflation data added another factor for Bitcoin investors to consider as they watched interest rate expectations and market conditions. With wholesale prices rising sharply, traders were assessing whether persistent inflation could affect the Federal Reserve's next move and influence demand for cryptocurrencies.