Українська
Русский
English
Bitcoin Falls Below $80,000 After U.S. Inflation Reaches 3.8% and Rate Cut Hopes Fade
Bitcoin briefly fell below the $80,000 level on Tuesday as global markets reacted to U.S. President Donald Trump warning that the ceasefire with Iran could collapse, alongside the latest U.S. inflation data.
Key Takeaways:
- On May 12, Bitcoin dropped below $80,000 after Trump warned that the U.S.-Iran ceasefire was “on life support.”
- The 1.6% decline in crypto prices triggered $232 million in long liquidations, while Bitcoin’s market capitalization fell to $1.61 trillion.
- Markets are now awaiting the Producer Price Index (PPI) report to determine whether 3.8% inflation will continue putting pressure on energy prices.
Prolonged Negotiations and Regional Instability
On May 12, Bitcoin briefly dropped below the $80,000 mark as global markets reacted to President Donald Trump warning that the ceasefire between the United States and Iran was “on artificial life support.” After testing the $82,000 level on Monday afternoon, the leading cryptocurrency showed signs of weakness and sharply fell to $80,900.
Although Bitcoin quickly recovered and traded above $81,000 during the early hours of Tuesday, it failed to maintain that level. Around 4:00 a.m. Eastern Time, the asset once again slipped below the threshold. From there, Bitcoin entered a gradual decline that erased nearly all gains achieved over the previous 48 hours. By 12:54 p.m. ET, Bitcoin had dropped to a daily low of $79,820 before rebounding to around $80,500.
As a result of the 1.6% daily decline, Bitcoin’s market capitalization fell to $1.61 trillion.
Speaking to reporters after reviewing Iran’s proposal, which he described as “unacceptable,” Donald Trump repeated claims that Tehran was stalling negotiations and appeared uninterested in reaching an agreement. This latest deadlock is being viewed as strengthening hardline voices in Washington advocating for renewed large-scale military action.
At the same time, renewed hostilities would likely keep the Strait of Hormuz — where shipping traffic has already been heavily disrupted since the conflict began — effectively closed. As warned by the CEO of Saudi Aramco, such a scenario could prevent oil markets and prices from stabilizing until at least 2027. This places additional pressure on the Trump administration and the Republican Party, as persistently high oil prices through the end of the year could negatively affect their chances in the November midterm elections.
Rising geopolitical tensions in the Middle East were not the only factor weighing on markets. The release of April U.S. Consumer Price Index (CPI) data, which showed inflation rising to 3.8% versus the expected 3.7%, weakened hopes for interest rate cuts. As anticipated, energy prices — particularly gasoline — were the primary driver. The next major catalyst will be the Producer Price Index (PPI) report scheduled for May 13, which will indicate whether price pressures continue building at the production level.
Meanwhile, over the past 24 hours, Bitcoin markets saw $57 million in long liquidations compared to $7.5 million in short liquidations. Across the broader cryptocurrency market, nearly $280 million in leveraged positions were liquidated, with approximately $232 million coming from long positions.
See also: "Ethereum Could Record Three Consecutive Losing Quarters for the First Time"
