Bitcoin Falls Below $65,500…Risk-Off Sentiment Spreads Amid Weak U.S. Inflation Data and Equities

Bitcoin (BTC) fell below $65,500, giving back most of its recent rebound. The move is attributed to broadening selling pressure across risk assets as a rise in the U.S. Producer Price Index (PPI) coincided with an equity-market pullback.

According to Cointelegraph on the 27th (local time), Bitcoin (BTC) dipped below the $65,500 level intraday. The decline traced a similar path to the intraday weakness in the S&P 500.

With the U.S. PPI for January up 0.5% month on month, expectations for rate cuts retreated. UBS’s downgrade of its view on U.S. equities to “neutral” also reinforced demand for safe-haven assets. The U.S. 10-year Treasury yield fell to 3.97% from 4.21% three weeks earlier, suggesting a shift of funds into bonds.

In a report, UBS said U.S. equities are trading at a 35% premium to the global average. Potential dollar weakness, policy uncertainty, and discussions over additional tariffs and financial regulation were cited as structural downside risks. Still, it kept its year-end S&P 500 target at 7,500 and assessed the likelihood of a sharp collapse as low.

Some in the market also suggest that if upside in equities is limited, capital could rotate into alternative assets. Gold’s market capitalization has expanded to $36.5 trillion, far surpassing the combined market cap of the top 10 technology companies (about $24 trillion). Even if Bitcoin rises to $100,000, its market cap would be only around $2 trillion, implying room for relative expansion.

There is also a view that investor sentiment could improve if strategic Bitcoin allocations by corporates or sovereign wealth funds resume. A notable example is the past case in which Tesla’s announcement of Bitcoin purchases served as a catalyst for a shift in market perceptions. For now, however, the prevailing assessment is that Bitcoin’s chances of clearly decoupling from U.S. equity trends remain limited.