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▲ Bitcoin (BTC), Cryptocurrency Drop/AI Generated Image
Bitcoin (BTC) fell below $79,000 as a surge in the US Producer Price Index and geopolitical tensions converged, leading to the liquidation of $304 million in long positions in the cryptocurrency market.
Bitcoin.com News reported on May 13 (local time) that Bitcoin dropped to as low as $78,704 during the day, falling below the $79,000 mark for the first time since May 4. Bitcoin had previously traded above $81,000, but investor sentiment for risk assets quickly cooled as US wholesale price increases proved steeper than expected.
This drop represents a decline of approximately $3,000 from the high of $82,145 recorded on May 11. According to the article, the decline began after the administration of US President Donald Trump rejected Iran's counter-peace proposal. With Trump describing US-Iran relations as “on life support,” inflation data reportedly further fueled investor anxiety.
A Bitunix analyst diagnosed that energy-driven price shocks are once again emerging as a core pressure in the US inflation structure, with pressure spreading to housing, services, and broader consumption sectors, regarding the recent Consumer Price Index (CPI). He stated, “The data suggests that despite two years of tight monetary policy, US inflation has not returned to a stable path.”
The Producer Price Index (PPI) jumped 1.4% in April 2026, reaching 6%, and in the market, not only did expectations for interest rate cuts recede, but the possibility of further interest rate hikes was also discussed. However, Polymarket and Kalshi showed that the US Federal Reserve (Fed) has an almost 100% chance of freezing the benchmark interest rate in June. Boston Federal Reserve President Susan Collins warned that some policy tightening would be necessary to return inflation to 2% in a timely manner.
Bitcoin's decline led to large-scale liquidations in the derivatives market. According to Coinglass data, Bitcoin long position liquidations amounted to $94 million, which was $37 million more than the previous day. Across the entire cryptocurrency market, $304 million in long positions and $71 million in short positions were liquidated. The combination of interest rate burdens and inflation shocks strengthened the trend of limiting the upside potential for risk assets like tech stocks and Bitcoin.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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