Bitcoin traded near $68,700 after the U.S. market opened Friday, following an intraday drop to about $67,500—its lowest level since mid-August. The price recovered some ground but remained below $70,000. U.S. producer prices rose at their fastest annual pace since November 2022, while stocks fell and traders adjusted their expectations for the Federal Reserve’s December rate decision.
PPI inflation reaches its highest annual rate since 2022
BTC/USD was down about 4% on the day, according to TradingView, after rebounding from a low not seen in nearly 12 weeks. The U.S. Bureau of Labor Statistics said the Producer Price Index rose 0.3% month over month and 6.5% year over year in October. Both readings were 0.1 percentage point below market expectations, but the annual increase was the largest since November 2022.
Prices for final-demand goods rose 0.5% from September, while prices for final-demand services increased 0.2%. The PPI tracks the prices domestic producers receive for goods and services, and its movements can offer a gauge of cost pressures that may feed into other inflation measures.
U.S. equities remained lower after the open. The S&P 500 fell 1.2%, while the technology-heavy Nasdaq Composite lost 1.5%. Investors were also watching developments involving Nvidia. The company’s co-founder and chief executive, Jensen Huang, resigned on Thursday.
FedWatch points to a 25-basis-point December hike
Market expectations for the Fed’s December decision shifted modestly after the PPI release. CME Group’s FedWatch tool showed the implied probability of a 25-basis-point rate increase rising to 89.7%, from 85.4% on Thursday. The probability assigned to a 50-basis-point increase fell to 10.3%, from 14.5%.
Economist Robin Brooks said a 25-basis-point increase in December was close to certain, but argued that a larger move might not address the current drivers of inflation. If elevated inflation is mainly tied to rising oil prices and the Strait of Hormuz, he said, a sharp rate increase would do little to resolve those pressures. If underlying inflation is accelerating, however, even a larger hike might not be enough to bring it down.
Analyst watches $73,000 for a weekly support break
Crypto trader and analyst Rekt Capital said a Bitcoin weekly close below $73,000 on Sunday would mark another break of weekly support this year. He noted that last week’s close was already below $75,000, $76,800 and $78,300, and said a similar pattern could emerge this week as selling momentum continued to build.
Bitcoin fell to around $60,000 after each of the two previous breaks below the support levels in question. Rekt Capital’s assessment is based on the weekly close. As of Friday, Bitcoin was near $68,700, well below $73,000.
At that price, Bitcoin was down 17.7% so far in the fourth quarter and 11.2% for the month. CoinGlass data showed the current quarter was the second-worst in Bitcoin’s recorded history. Traders were focused on whether the price could stabilize and where the week would close relative to the $73,000 level.