The price of bitcoin BTC$76,847.77 has dropped over the past 24 hours, and what happens next may hinge on whether today’s U.S. inflation report can halt the selloff in government bonds.

The largest cryptocurrency is trading near $77,000, with the 10-year Treasury yield around 4.94% and the Dollar Index near 99.15. August’s consumer price index, due at 8:30 a.m. ET, could determine how much pressure those markets exert on crypto heading into next week’s Federal Reserve interest-rate decision.

The concern is that borrowing costs reflect inflation risks rather than stronger growth.

“This is the worst mix for Bitcoin: a competing 5% risk-free rate without the nominal-growth impulse that usually accompanies yield moves,” trading…