Bitcoin News Today: Bitcoin Plummets 4% After Touching $124K High Amid Profit-Taking and Inflation Fears

Bitcoin briefly surged to an all-time high of $124,501 before swiftly retreating by 4% to $118,427 within hours, erasing recent gains and signaling a short-term correction [1]. The sudden pullback occurred amid increased selling pressure, particularly as traders sought to lock in profits after reaching a key milestone [2]. According to CryptoQuant’s JA Maartunn, taker sell volume spiked to $3.13 billion, a sharp increase from recent levels and a sign of aggressive profit-taking by both retail and institutional participants [2].

The correction was also influenced by broader macroeconomic data. The U.S. Producer Price Index (PPI) came in at 3.3%, higher than expected, raising concerns about inflation and casting doubt on the likelihood of a September interest rate cut by the Federal Reserve [2]. Polymarket data reflected this shift in sentiment, showing a decline in the odds of a rate cut, which added to the cautious mood among crypto traders [2]. Although core CPI remained favorable, the combination of mixed economic signals led to a more defensive stance in both traditional and digital asset markets [2].

The sharp drop also triggered significant liquidations across the crypto market. Over the past 24 hours, more than $1 billion in leveraged positions were wiped out, with Bitcoin accounting for $218 million of those losses [2]. Ethereum faced even heavier damage, with $309.9 million in liquidations, including a single $6.25 million trade on OKX [2]. Despite the volatility, some analysts noted that Bitcoin has historically bounced back from macro-driven selloffs, suggesting that selling immediately after a new all-time high might be premature [2].

The pullback also highlighted a broader shift in market dynamics. Bitcoin’s dominance dipped to 59.87%, as Ethereum and other altcoins attracted growing attention [6]. While Bitcoin remains the largest and most liquid cryptocurrency, the rise of alternative assets signals a potential realignment in the crypto market’s structure. Institutional adoption and continued inflows into Bitcoin ETFs remain strong tailwinds, yet the recent volatility underscores the challenges of sustaining upward momentum in the face of macroeconomic uncertainty [2].

Market participants continue to monitor key indicators for signs of a potential recovery or further consolidation. Bitcoin’s 30-day trading range has narrowed to a two-year low, indicating a period of reduced volatility and potential preparation for a more decisive directional move [4]. Meanwhile, the absence of immediate strategic purchases of Bitcoin by the U.S. government has added to investor caution [8]. Despite these headwinds, the long-term fundamentals supporting Bitcoin—such as growing institutional interest and macroeconomic tailwinds—remain intact [1].

Source: [1] Bitcoin (BTC) Price Pulls Back After Hitting $124K (https://captainaltcoin.com/bitcoin-btc-price-pulls-back-after-hitting-124k-heres-whats-driving-the-drop/)

[2] Bitcoin tumbles from $124K peak — now $118K. What's ... (https://m.economictimes.com/news/international/us/bitcoin-tumbles-from-124k-peak-now-118k-whats-rattling-the-crypto-market-key-numbers-to-watch/articleshow/123307934.cms)

[4] Bitcoin Volatility Hits 2-Year Low As 30-Day Range Tightens (https://www.newsbtc.com/bitcoin-news/bitcoin-volatility-hits-2-year-low-as-30-day-range-tightens/)

[6] Bitcoin's throne is wobbling, and Ethereum could be king ... (https://m.economictimes.com/news/international/us/bitcoins-throne-is-wobbling-and-ethereum-could-be-king-soon-heres-the-story-no-one-is-talking-about/articleshow/123289615.cms)

[8] Latest Crypto & Bitcoin News - Yahoo Finance (https://finance.yahoo.com/topic/crypto/)