Bitcoin News Today: Bitcoin's Descent Unveils a Liquidity War Below $112K

Bitcoin has recently retreated below $113,000, marking a 17-day low amid growing concerns over price manipulation and broader macroeconomic uncertainties. Traders and analysts have observed a significant depletion of bid liquidity on exchanges, with key price levels such as $112,300 and $120,000 now attracting heightened attention as potential reversal zones [1]. Keith Alan, co-founder of Material Indicators, highlighted that the appearance of additional bid liquidity at lower levels, particularly near $105,000, may indicate deliberate price manipulation by large market participants [1]. The influence of these actions, he noted, could further depress Bitcoin’s price as long as such liquidity continues to be absorbed by sellers.

The ongoing volatility has also raised concerns about the broader cryptocurrency market, with altcoins showing signs of potential fragility. TheKingfisher, a popular crypto commentator, warned that a continued decline in Bitcoin’s price could trigger sharp corrections in the altcoin segment, with drops of 10–30% not unlikely if Bitcoin falls by 5% [1]. Despite these concerns, some analysts remain cautiously optimistic. Rekt Capital drew parallels between the current market dynamics and those seen in 2017 and 2021, noting that similar retracements in previous bull cycles were followed by new all-time highs [1]. This historical context suggests that the current pullback, while painful, may not signal the end of the broader bullish trend.

The immediate catalyst for Bitcoin’s decline has been a shift in investor sentiment triggered by macroeconomic uncertainties, particularly around U.S. trade policies and inflation. New tariffs on aluminum and steel products have raised concerns about inflationary pressures and supply chain disruptions, contributing to a risk-averse environment for digital assets [2]. In addition, a hotter-than-expected Producer Price Index (PPI) report has reignited fears of inflation reacceleration, leading to a reassessment of the likelihood of a September rate cut by the Federal Reserve [4]. Investors had previously priced in an 85–98% probability of a 25-basis-point cut, but this has now dropped to 85% [5]. The release of the July FOMC minutes on August 20 and Chair Jerome Powell’s Jackson Hole speech on August 22 will be closely watched for clarity on the Fed’s policy path [3].

The cryptocurrency market’s sensitivity to rate expectations has been starkly illustrated in recent trading sessions. Bitcoin fell 3.2% in the past 24 hours, while ether dropped 5.3%, with several altcoins experiencing even steeper declines [4]. Companies in the crypto space, including digital asset treasury firms and miners, have also suffered, with shares of Marathon Digital Holdings, Coinbase, and Marathon Digital falling between 5.7% and 7.4% [3]. The broader market downturn reflects the high liquidity dependence of cryptocurrencies, which makes them particularly vulnerable to tightening monetary conditions [4]. If Powell signals a delay in rate cuts, the sell-off could intensify, especially for smaller tokens with thinner order books.

The options market has further amplified fears of a deeper correction, with Bitcoin’s 30-day options delta skew reaching 12%, the highest level in over four months [2]. This metric, which measures the imbalance between put and call options, indicates extreme bearish sentiment among investors. A similar spike occurred in April when Bitcoin fell below $74,500, followed by a strong rebound. While the current environment remains uncertain, historical precedents suggest that periods of extreme fear often precede significant rebounds [2]. As markets await key macroeconomic signals and central bank guidance, the coming week will be pivotal in shaping the trajectory of both traditional and digital asset classes [5].

Source: [1] Bitcoin analysts point to 'manipulation' as BTC price falls to 17-day low (https://cointelegraph.com/news/bitcoin-analysts-point-to-manipulation-as-btc-price-falls-to-17-day-low) [2] Why is Bitcoin crashing and will $112K be the final bottom? (https://cointelegraph.com/news/why-is-bitcoin-crashing-and-will-112k-be-the-final-bottom) [3] Crypto Bloodbath: 8 Reasons Why the Fed Might Not Want ... (https://www.coindesk.com/markets/2025/08/19/crypto-bleeds-ahead-of-powell-s-jackson-hole-speech-eight-reasons-traders-are-nervous) [4] Crypto Bleeds Ahead of Powell's Jackson Hole Speech (https://finance.yahoo.com/news/crypto-bleeds-ahead-powells-jackson-231313291.html) [5] Bitcoin Drops Below $114K, Ether Loses $4.2K as Jackson ... (https://www.coindesk.com/markets/2025/08/19/bitcoin-drops-below-usd114k-ether-loses-usd4-2k-as-jackson-hole-speech-might-bring-hawkish-surprise)