Bitcoin plunged 6.2% on May 13 to hit $78,400, breaking decisively below the psychologically critical $80,000 level for the first time since March. The selloff was triggered by the Bureau of Labor Statistics' PPI report showing producer prices surging 6% year-over-year, far above the 5.2% consensus, which sent real yields higher and crushed risk appetite across crypto markets.
Over $400 million in leveraged long positions were liquidated across major exchanges within four hours of the PPI release, according to Coinglass data. Ethereum fell 7.8% to $2,900, while crypto-exposed equities Coinbase (COIN) and MicroStrategy (MSTR) dropped 5.4% and 8.1% respectively.
What happened
The crypto selloff began within minutes of the 8:30 AM ET PPI release on May 13. Bitcoin, which had been trading around $83,500 in early morning, dropped sharply as the hot inflation data reshaped rate expectations. The 10-year Treasury yield spiked to 4.52%, making risk-free returns more attractive relative to volatile crypto assets. The $80,000 level, which had served as support since early April, broke at approximately 10:15 AM ET, triggering a cascade of stop-loss orders and leveraged liquidations. Funding rates on perpetual futures flipped deeply negative as shorts piled in, and the fear and greed index dropped from 62 (greed) to 38 (fear) within six hours. Altcoins were hit even harder, with Solana dropping 9.1% and Cardano falling 11.3%.
Why it matters
Bitcoin's reaction to the PPI data demonstrates that crypto remains tightly correlated to macro liquidity conditions, despite narratives about it being an inflation hedge. When real yields rise -- as they did sharply on the 6% PPI print -- the opportunity cost of holding zero-yielding assets like Bitcoin increases. The break below $80,000 is technically significant because it was the level that held during three separate tests in April and early May, and its violation could open the door to a retest of $72,000-$75,000 support.