Bitcoin Dips Below $80K After U.S. Inflation Rises, Iran Talks Stall

Bitcoin fell below $80,000 on May 12 after U.S. April consumer inflation rose to 3.8% and talks between the United States and Iran over a ceasefire stalled. The cryptocurrency hit an intraday low of $79,820 and its market capitalization narrowed to about $1.61 trillion, a 24-hour decline of roughly 1.6%.

After testing $82,000 on Monday afternoon, bitcoin slipped to $80,900 and dropped under $80,000 around 4 a.m. EDT on Tuesday. By 12:54 p.m. EDT the price reached $79,820 before recovering to about $80,500.

Traders attributed the decline to higher geopolitical risk and the hotter-than-expected inflation reading. U.S. consumer price index data for April showed inflation at 3.8% year over year, above a 3.7% projection, with energy and gasoline prices driving most of the increase. The producer price index, due May 13, is being watched for signs of rising wholesale inflation.

President Donald Trump told reporters he had received Iran’s proposal, called it “unacceptable,” and described the ceasefire as “on life support.” Those remarks raised concern that negotiations could stall and increased calls among hawks in Washington for stronger military action. Shipping through the Strait of Hormuz has been constrained during the conflict.

The chief executive of Saudi Aramco warned that oil markets and prices would not stabilize until at least 2027 if activity through the Strait of Hormuz remains affected. Analysts flagged that sustained higher fuel costs through the rest of the year may carry political implications for the U.S. administration and lawmakers ahead of the November midterm elections.

Aggregated trading data showed roughly $280 million in leveraged crypto positions were liquidated as prices fell, with about $232 million in long bets wiped out and $57 million in long positions recorded as liquidations versus about $7.5 million in shorts.

Other major tokens also saw increased volatility as traders reduced leverage. Market participants flagged the PPI report and any further developments in U.S.-Iran diplomacy as likely near-term catalysts for price direction.