Bitcoin News Today: Bitcoin drops below $119K as hotter-than-expected US PPI sparks rate cut concerns

Bitcoin’s recent selloff has intensified following a hotter-than-expected U.S. Producer Price Index (PPI) report, which stoked concerns about prolonged inflation and delayed Federal Reserve rate cuts [1]. The report showed a 3.3% annual increase in July—well above the 2.5% forecast and the 2.3% reading from the previous month [2]. This marked the largest monthly rise in U.S. PPI since June 2022, complicating the narrative of easing inflation that had briefly gained traction after the July Consumer Price Index (CPI) data showed a stable 2.7% annual increase [3].

Bitcoin (BTC) dropped below $119,000 in the days following the PPI release, retreating from its record high of $123,400 to around $117,400. The decline reflects a broader risk-off sentiment as investors reassess the likelihood of aggressive Fed easing. The CME FedWatch tool currently shows a 90.5% probability of a 0.25% rate cut on September 17, down from a 99.8% likelihood earlier in the week [4]. This drop in rate cut expectations has increased pressure on Bitcoin and other risk assets, as higher inflation readings often suggest a more hawkish policy path from the Fed.

From a technical perspective, the price action has been marked by a bearish divergence between Bitcoin’s price and the relative strength index (RSI), raising the possibility of a short-term liquidity grab after the asset hit a new all-time high [5]. Additionally, the formation of a double top pattern on the three-day chart—a structure previously seen in January 2025—has drawn attention as a potential trigger for a corrective phase [6]. A retest of key support levels below $117,000 has also increased in probability, especially with a long-term market fractal pattern suggesting the likelihood of further downside.

Ethereum (ETH) has also seen weakness, with the Investing.com Index showing a nearly 3.5% decline to $4,521.84. The broader crypto market has become increasingly sensitive to macroeconomic signals, particularly given its relatively smaller size and lower institutional participation compared to traditional assets [7]. This sensitivity has been amplified by the recent volatility, with traders and investors reacting swiftly to new data points and central bank messaging.

Miner activity has also reflected growing uncertainty. Binance saw a notable increase in Bitcoin transfers from miners, signaling a potential wave of liquidations as the price drifted downward. Such behavior can exacerbate short-term volatility in a market that is still grappling with liquidity challenges during sharp corrections [8].

Meanwhile, the impact of the hot inflation data extended beyond crypto into traditional markets. Global bond markets saw increased turbulence as investors recalibrated expectations for monetary policy, while Asian stocks paused their recent gains driven by hopes for Fed easing [9]. The interconnectedness of global financial markets was on full display, with U.S. inflation data reverberating across asset classes and geographies.

Although the immediate outlook for Bitcoin remains bearish, some analysts note that the July CPI data still suggests a path where inflation stabilizes above but close to the Fed’s 2% target. However, the PPI’s stronger-than-anticipated reading has reignited concerns that inflation may persist for longer, potentially leading to a more cautious approach from policymakers [10].

As the market navigates this period of uncertainty, the focus will remain on upcoming economic releases and the Fed’s communication strategy. Investors must be prepared to differentiate between short-term volatility and long-term trends, especially in a market as sensitive to macroeconomic signals as cryptocurrency [11].

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Sources:

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

[2] Reuters (Investing.com) - 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] Business Standard - 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] Seeking Alpha - July CPI Report: Tariffs Coming In Slow But Steady https://seekingalpha.com/article/4813429-july-cpi-report-tariffs-coming-in-slow-but-steady

[5] Cointelegraph - Equity Markets vs. Crypto Markets Overview https://cointelegraph.com/category/market-analysis

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

[7] Julius Baer - Podcasts: US Equities sell off and yields jump on inflation scare https://www.juliusbaer.com/en/insights/podcasts/

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

[10] Cointelegraph - Bitcoin’s new record high has traders asking: Did BTC price top at $124K? https://cointelegraph.com/news/bitcoin-sell-off-intensifies-after-hot-us-inflation-report-rattles-stocks-crypto?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound