Bitcoin News Today: Bitcoin spikes to $124,517 then plummets on hotter-than-expected PPI data

Bitcoin surged past $124,000 midweek, driven by optimism around macroeconomic conditions and increasing adoption of Bitcoin ETFs. The price briefly reached a new all-time high of $124,517 before a sharp correction ensued following the release of the U.S. Producer Price Index (PPI) data on August 14, which exceeded expectations and triggered a significant sell-off [1]. During the drop, Bitcoin fell from above $124,000 to below $118,000 within minutes, while Ethereum (ETH) dropped from $4,791 to under $4,500. The market saw over $1 billion in leveraged positions liquidated as a result [1].

The crypto market’s total capitalization rose slightly from $3.97 trillion to $4.04 trillion for the week, but this figure fails to capture the dramatic volatility experienced [1]. At one point, the market cap reached a near-record $4.28 trillion, fueled by strong performances from Bitcoin and major altcoins like Ethereum, Solana (SOL), and Dogecoin (DOGE). However, the PPI data acted as a trigger, reversing the upward momentum and highlighting the market’s sensitivity to macroeconomic signals [1].

The PPI increase is widely seen as evidence that inflationary pressures are persisting, potentially undermining hopes for imminent Federal Reserve rate cuts. This development has reinforced concerns over prolonged high inflation and tighter monetary policy, which has led to renewed caution among investors [1].

While Bitcoin closed the week at around $118,800, up 0.2% from the previous week, the sharp intraweek correction revealed structural fragility in leveraged trading environments. Analysts have emphasized that large institutional and retail positions were vulnerable to sudden market shifts triggered by macroeconomic reports [1]. The event also showcased the role of algorithmic trading and automated liquidation mechanisms in accelerating price movements during periods of high volatility [1].

Ethereum ended the week with a 4.4% gain, despite the midweek selloff, while several top-20 altcoins also posted marginal gains. However, notable underperformers included XRP, which closed at around $3.12, down 6.7% from the start of the week [1]. XRP’s struggles contrast with the bullish projections from some analysts, who still expect it to breach the $4 mark in the coming weeks [1].

Asymmetry USDaf (USDAF), a stablecoin-like asset, recorded a price decline of -1.10% in the past seven days, underperforming the broader cryptocurrency market [3]. Its market capitalization currently stands at BTC97.6554, with a fully diluted valuation (FDV) of the same amount, suggesting that all 12 million tokens are already in circulation [3].

With macroeconomic data and central bank policy decisions continuing to influence market sentiment, traders and investors are now closely monitoring upcoming reports for further signals. The recent volatility underscores the need for robust risk management strategies, especially for leveraged positions, as liquidity events can quickly spiral into cascading losses without proper hedging [1].

[1] https://news.bitcoin.com/crypto-weekly-wrap-bitcoin-hits-124k-before-inflation-data-sparks-1b-liquidation-frenzy/

[2] https://stocktwits.com/symbol/BTC.X

[3] https://www.coingecko.com/en/coins/asymmetry-usdaf