Bitcoin News Today: Bitcoin drops over 2% as U.S. inflation data dampen rate cut hopes

Bitcoin’s recent ascent has been abruptly curtailed by unexpected inflationary pressures, shaking investor confidence and causing the cryptocurrency to pull back from record highs. After reaching an all-time high of $124,350 earlier this week, Bitcoin fell more than 2% to $115,000, with Ethereum also slipping by 3.33% to $4,272. The market’s muted reaction is reflected in CoinMarketCap’s “Crypto Fear and Greed” index, which currently reads at 56—indicating a neutral sentiment among traders and investors [1].

The downturn is largely attributed to recent U.S. inflation data that exceeded expectations, complicating market forecasts for Federal Reserve rate cuts. July’s Producer Price Index (PPI) rose by 3.3% year-over-year, countering previously softer Consumer Price Index (CPI) readings and dimming hopes for a September rate cut. As a result, the U.S. dollar has gained strength, and risk aversion has increased across both traditional and crypto markets. Vincent Liu, Chief Investment Officer at Kronos Research, noted that the inflation shockwave has prompted heightened caution among investors, stalling Bitcoin’s upward momentum [1].

While state-driven demand for Bitcoin remains an area of speculation, U.S. Treasury Secretary Scott Bessent recently clarified that the government has no immediate plans for strategic reserve purchases of the cryptocurrency. Instead, the Treasury is focusing on budget-neutral strategies for reserve growth, effectively sidelining any government-led procurement in the near term [1].

Spot Bitcoin ETFs, however, continue to show mixed activity. While Grayscale and Ark Invest experienced outflows in recent trading sessions, BlackRock’s IBIT product attracted net inflows, signaling a shift toward lower-fee institutional products. A similar pattern was observed in Ethereum ETFs, suggesting a broader trend of consolidation among market participants [1].

Critical technical support levels have now come into focus for Bitcoin. Analyst Rachael Lucas highlighted that the $115,000 and $112,500 levels are key thresholds; a break below either could pressure the price toward $110,000 and trigger further volatility. Institutional interest and continued ETF inflows are currently providing some structural support, but these may not be enough to offset macroeconomic headwinds [1].

Looking ahead, market attention is shifting toward the Jackson Hole Symposium, where Federal Reserve Chair Jerome Powell could provide insight into the central bank’s future policy direction. If Powell signals a dovish stance, it may rekindle risk appetites and offer Bitcoin a reprieve. For now, however, the market is navigating a fragile balance between optimism and caution, with inflation showing no immediate signs of easing [1].

Source: [1] Bitcoins New Era: Top 4 Crypto Stocks for Long-Term Growth (https://www.archivemarketresearch.com/news/article/bitcoins-new-era-top-4-crypto-stocks-for-long-term-growth-74874)