US PPI Surge Triggers Liquidity Stress in Crypto Markets; Bitcoin Drops Below $66,000

U.S. Producer Price Index (PPI) inflation rose to 2.9% in February 2026, significantly exceeding market expectations and signaling persistent inflationary pressures. The unexpected data release triggered an immediate sell-off in risk assets, causing Bitcoin (BTC) to plunge below the critical $66,000 support level. Beyond the price decline, crypto markets faced new liquidity stress as the PPI data rattled investor confidence and tightened market depth. Market participants now anticipate that the Federal Reserve (Fed) will maintain interest rates at current levels for a longer duration to combat stubborn inflation. This 'higher-for-longer' narrative has strengthened the U.S. Dollar Index (DXY) while weighing heavily on non-yielding assets. The surge in PPI suggests that the path toward monetary easing remains uncertain, prompting a reassessment of exposure to volatile assets.