Bitcoin News Today: Bitcoin Retraces to $118,000 Amid Supply Zone Struggles and Inflation Concerns

Bitcoin’s price action remains in focus as the asset struggles to maintain a breakthrough above a key supply zone. Following a record high of $124,457 earlier in the month, the price of BTC has retreated back to the $118,000 level, raising questions about its near-term direction [1]. This pullback occurred after Bitcoin briefly crossed the $125,000 threshold, a level that many analysts had expected to mark the beginning of a new bullish phase [2]. However, the failure to sustain momentum above the supply zone has triggered a consolidation phase and a retest of lower levels.

The recent price behavior of BTC reflects a pattern of sharp rebounds followed by consolidation and retracements. On August 13, Bitcoin surged past $120,000 after a pullback from the $116,000–$118,000 range [3]. Yet, the move was short-lived, as the price soon lost steam and drifted back to the $118,000 area. Analysts have highlighted that this fluctuation signals a market grappling with uncertainty—particularly regarding whether the traditional four-year halving cycle still plays a meaningful role in shaping Bitcoin’s price trajectory [4].

Exchange data further adds a layer of complexity to the current narrative. Binance’s Bitcoin reserves have risen to 579,000 BTC, a figure that has been interpreted as a sign of increased short-term supply and potential downward pressure on the price [5]. According to Arab Chain, a contributor on CryptoQuant, this increase could be attributed to profit-taking by large holders or liquidity adjustments by market makers. If the trend of rising reserves continues alongside elevated funding rates and open interest, it may indicate an imminent correction. Conversely, a stabilization or decline in reserves could signal renewed scarcity and the continuation of an uptrend.

Macro factors have also played a role in Bitcoin’s recent performance. In early August, BTC dropped below $118,000 after reaching a record high, coinciding with a stronger-than-expected July producer price index (PPI) reading [1]. The rise in inflation data has traditionally weighed on risk assets, contributing to the current price correction. However, some analysts remain cautiously optimistic, noting that the market structure currently supports a limited correction rather than a full-blown reversal [5].

Looking forward, the ability of BTC to reclaim and hold the $120,000 level will be a key determinant of its next move. Failure to do so could expose the asset to further downward pressure, with key support levels likely to become focal points for traders and investors [6]. Market participants are closely watching for signs of renewed buying interest and a potential breakout from the current consolidation pattern.

Source:

[1] Bitcoin Price Falls From Record High on Hot Inflation Data (https://www.tradingnews.com/news/bitcoin-price-falls-from-record-high-on-hot-inflation-data)

[2] BTC Surges After Pullback, Price Breaks $120000 (https://www.gate.com/crypto-wiki/article/btc-surges-after-pullback-price-breaks-120000-opportunity-or-bull-trap)

[3] Bitcoin News Today: Bitcoin Q4 to Test 4-Year Halving Cycle (https://www.ainvest.com/news/bitcoin-news-today-bitcoin-q4-test-4-year-halving-cycle-institutional-shift-2508/)

[4] Q4 Will Decide If The 4-Year Bitcoin Cycle Is Dead: Analyst (https://www.mitrade.com/insights/news/live-news/article-3-1041507-20250815)

[5] Binance Bitcoin Reserves Surge To 579000 BTC (https://www.newsbtc.com/bitcoin-news/binance-bitcoin-reserves-579000-btc-profit-bullish/)

[6] Bitcoin (BTC) Price: Bulls Eye $137K as Fed Rate Cut (https://blockonomi.com/bitcoin-btc-price-bulls-eye-137k-as-fed-rate-cut-odds-soar-following-cpi-report/)