Bitcoin News Today: Bitcoin plummets below $118,000 as U.S. PPI fuels Fed policy uncertainty

Bitcoin’s price correction deepened in late July and early August 2025 as fresh U.S. inflation data stirred concerns over the Federal Reserve’s potential delay in easing monetary policy [1]. The Producer Price Index (PPI) surged by 3.3% year-over-year in July, far exceeding the 2.5% forecast and the 2.3% reading from the prior month [3]. The data marked the largest monthly increase since June 2022, signaling persistent inflationary pressures on the supply side of the economy [1]. This came as a surprise to markets that had already priced in optimism from the July Consumer Price Index (CPI), which showed a more moderate 2.7% annual increase [7].

The conflicting data created uncertainty around the Fed’s next move. While the odds of a 0.25% rate cut in September remained at 90.5% according to CME FedWatch, the likelihood had briefly spiked to 99.8% just days earlier following positive CPI readings [3]. The PPI report now clouded those expectations, with investors recalibrating for a more cautious stance from the central bank [1].

Bitcoin, which had climbed above $123,400 in early August, pulled back sharply, dropping below $118,000 by mid-August [3]. The sell-off accelerated as traders absorbed the higher-than-expected inflation numbers, reinforcing the asset’s sensitivity to macroeconomic cycles and interest rate expectations [2]. The sharp correction also reflected technical bearish signals, including a double top pattern on the three-day chart and a bearish divergence in the RSI following the recent all-time high [3]. These patterns had previously signaled a correction during Q1 2025, when Bitcoin fell as low as $75,000 [3].

The broader crypto market followed suit, with Ethereum declining 3.5% to $4,521.84, and bearish sentiment growing in derivatives markets with more bets favoring ETH below $5,000 [4]. Meanwhile, Bitcoin miners were observed moving larger quantities of BTC to Binance, indicating hedging activity ahead of potential volatility [5]. This behavior highlighted the rising anxiety among participants across the crypto ecosystem.

Equity markets also felt the ripple effects of the inflation data. U.S. stocks faced renewed selling pressure as the prospect of delayed rate cuts diminished, while Asian markets adjusted to the shifting Fed narrative after weeks of optimism over monetary easing [3]. The global re-rating of risk assets underscored the interconnectedness of traditional and digital financial markets in the current macroeconomic environment.

Looking ahead, the path for Bitcoin remains uncertain. A key level to watch is $120,000, which could determine whether the price can regain bullish momentum or face further consolidation and potential pullbacks. If Bitcoin fails to hold above $112,000, it may open the door for a deeper correction into the $105,000–$110,000 range [3]. For now, the market is closely monitoring upcoming inflation reports and Fed commentary for clarity on the central bank’s policy trajectory.

Source:

[1] title: US PPI beats estimates with 3.3% annual gain in July (https://www.bitget.com/news/detail/12560604912331)

[2] title: Hot U.S. inflation data rattles global bond markets (https://www.investing.com/news/economy-news/fed-ratecut-drumbeat-pegs-back-dollar-asian-stocks-take-a-breather-4190627)

[3] title: Asian shares mixed after days of gains driven by hopes for US rate cuts (https://www.business-standard.com/markets/news/asian-shares-mixed-after-days-of-gains-driven-by-hopes-for-us-rate-cuts-125081400609_1.html)

[4] title: EOS Falls 10.24% In Selloff (https://za.investing.com/news/cryptocurrency-news/eos-falls-1024-in-selloff-3840004)

[5] title: Bitcoin At Risk Of Pullback As Binance Miner Distributions... (https://www.mitrade.com/insights/news/live-news/article-3-1033948-20250813)

[7] title: July CPI Report: Tariffs Coming In Slow But Steady (https://seekingalpha.com/article/4813429-july-cpi-report-tariffs-coming-in-slow-but-steady)