Bitcoin News Today: Bitcoin Consolidates Below $123,000 Amid Investor Caution and Inflation Concerns

Bitcoin's recent pullback has drawn attention to investor caution rather than a signal of market weakness, as the cryptocurrency consolidates within a defined trading range. The digital asset surged to a record high of $123,640 on August 14, 2025, before retreating 5.44% to return to the lower end of its established range, hovering near $116,368 on August 18 [1]. This consolidation reflects a period of digestion among investors, rather than a loss of bullish momentum.

The correction was triggered by higher-than-expected U.S. inflation data, which broadly dampened risk appetite across asset classes. In response, Bitcoin has entered a consolidation phase, with traders adopting a wait-and-watch stance ahead of potential Federal Reserve policy signals. According to the Bitfinex Alphareport from August 18, the likelihood of a rate-cutting cycle later in the year could provide a supportive backdrop for Bitcoin and Ethereum (ETH). Until then, the market is expected to remain range-bound, with volatility primarily influenced by incoming macroeconomic data [1].

Ethereum has also played a critical role in shaping the broader crypto market sentiment. ETH climbed to $4,783.90 from April lows of $1,386.80, reinforcing its position as the primary liquidity driver outside of Bitcoin. This rally has fueled renewed speculation in altcoins, with Ethereum’s performance often serving as a bellwether for broader market direction. However, altcoins remain more vulnerable than the major cryptocurrencies, as liquidity continues to concentrate in Bitcoin and Ethereum [1].

Bitcoin’s market dominance has declined from 65% to 58.89% over the past two months, a trend historically associated with increased speculation in alternative assets. This dynamic indicates that capital is shifting down the risk curve, a pattern typically observed during the early stages of bull markets. Institutional inflows first consolidate in Bitcoin and Ethereum before expanding into the broader market. A decisive break above all-time highs in the majors would serve as the key catalyst for renewed inflows and broader market strength [1].

At the time of the report, Bitcoin was ranked 1 by market cap, with a total market capitalization of $2.32 trillion and a 24-hour trading volume of $70.41 billion. Despite a 1.23% decline in the past 24 hours, the market remains resilient amid broader uncertainty. The total crypto market was valued at $3.94 trillion, with a 24-hour trading volume of $189.38 billion [1].

While Bitcoin and Ethereum remain central to the market’s structure, the broader altcoin market remains under pressure. This environment is expected to persist until a clear macroeconomic catalyst emerges that can drive renewed momentum and broader participation across the crypto ecosystem.

Source: [1] Bitcoin consolidation below $123,000 reflects caution rather than market weakness (https://cryptoslate.com/bitcoin-consolidation-below-123000-reflects-caution-rather-than-market-weakness/)