Bitcoin News Today: Bitcoin tests resilience as inflation surprises challenge Fed’s next move

Bitcoin prices fell below $115,000 in early August after reaching record highs earlier in the month, with the broader crypto market experiencing significant volatility amid macroeconomic uncertainties. The price decline, following a surge past $124,496 in late July, triggered over $500 million in forced liquidations of long positions across major cryptocurrencies like Bitcoin and Ether. According to CoinGlass data, the sell-off was exacerbated by higher-than-expected July wholesale inflation figures, which cast doubt on the likelihood of a Federal Reserve rate cut in September, a factor that had previously supported crypto prices [1].

The U.S. Producer Price Index (PPI) rose 0.9% in July—the largest increase in three years—driven largely by surging service-sector costs, including trade margins, airfares, and hotel stays [5]. This data, combined with a 0.2% rise in the Consumer Price Index (CPI), signaled that inflationary pressures remained persistent, challenging expectations that recent tariffs would moderate consumer prices [6]. The data also fueled concerns that businesses were passing on higher costs to consumers, with economists like Carl Weinberg of High Frequency Economics warning that the report reinforced the Fed’s stance on cautious policy [5].

Market participants closely watched the implications for the Federal Reserve’s policy path, particularly ahead of the Jackson Hole Economic Symposium in late August. While financial markets priced in an 85% probability of a rate cut in September, some economists called for restraint, emphasizing the risks of an inflationary surprise [7]. Treasury Secretary Scott Bessent highlighted the need to consider “budget-neutral pathways to acquire more bitcoin,” suggesting continued institutional interest in the asset despite macroeconomic headwinds [1]. Meanwhile, crypto ETFs remained a key support, with net inflows of $547 million for Bitcoin and $2.9 billion for Ether over the prior week, despite recent outflows recorded on August 11 [1].

The crypto market’s reaction to macroeconomic developments was mirrored in related equities, with mixed performance from major players. Coinbase and Galaxy Digital saw modest gains, while Bitmine Immersion and Bullish experienced declines. The broader market remained sensitive to labor data, with the S&P 500 and Nasdaq Composite showing declines amid a tightening labor market [1]. Analysts noted that the market was entering a phase of consolidation, with Bitcoin likely to test support levels around $112,000 in the near term [2].

The interplay between inflation and monetary policy will remain a critical factor for Bitcoin and other cryptocurrencies in the coming months. With Fed officials divided on the timing and magnitude of potential rate cuts, investors are likely to continue parsing economic data closely. As the central bank weighs its dual mandate of price stability and maximum employment, the crypto market’s resilience will depend on sustained institutional demand and macroeconomic clarity [7].

Source:

[1] Crypto Market Today (https://www.cnbc.com/2025/08/18/crypto-market-today.html)

[2] Bitcoin Sell Pressure 'Palpable' as BTC Bid Support Stacks (https://cointelegraph.com/news/bitcoin-sell-pressure-palpable-btc-bid-support-stacks-at-105k)

[3] Bitcoin, Ethereum Slip as Crypto Markets Pull Back After Hitting 2025 Highs (https://finance.yahoo.com/news/bitcoin-ethereum-slip-as-crypto-markets-pull-back-after-hitting-2025-highs-155818704.html)

[4] US Producer Inflation Heats Up as Goods, Services Prices Soar (https://www.reuters.com/world/us/us-producer-inflation-heats-up-goods-services-prices-soar-2025-08-14/)

[5] CPI Home: U.S. Bureau of Labor Statistics (https://www.bls.gov/cpi/)

[6] 'The Risk That's on Our Doorstep': July Inflation Data Has Economists on Edge (https://finance.yahoo.com/news/the-risk-thats-on-our-doorstep-july-inflation-data-has-economists-on-edge-133057270.html)