Bitcoin News Today: Bitcoin Tumbles 4% After Hot Inflation Data Dampen Rate-Cut Hopes

Bitcoin’s brief ascent to an all-time high was swiftly followed by a significant correction, leaving the digital asset struggling to sustain momentum. On August 14, 2025, Bitcoin briefly touched a record above $124,000 before retracting over $5,800 in a matter of hours, closing at around $118,427. This sharp pullback erased all of its gains from the previous two days and marked one of the most volatile swings in recent memory [1]. The decline, which saw Bitcoin drop nearly 4% in a single session, sparked concerns among investors who had anticipated a sustained rally amid optimism over Federal Reserve rate cuts and growing institutional adoption [2].

The correction followed a surge driven by a combination of factors, including rising confidence in Fed easing and strong equity market performance, particularly in U.S. indices like the S&P 500 and Nasdaq, which hit record highs [3]. Additionally, the entry of corporate treasury holdings into the Bitcoin market had amplified bullish sentiment in the days leading up to the drop. However, the rally proved fragile in the face of new economic data. Hotter-than-expected inflation figures released in late August tempered expectations for aggressive rate cuts, triggering a sell-off not only in Bitcoin but also in broader financial markets [4].

Analysts suggested that the market had become increasingly sensitive to macroeconomic signals, with traders recalibrating positions in anticipation of central bank policy shifts. The sudden liquidation of over $577 million in Bitcoin positions during the correction underscored the high leverage and speculative nature of the market at the time [5]. While Bitcoin's long-term trajectory remains aligned with macroeconomic trends and institutional buying, the episode highlights the challenges of maintaining stability in a rapidly evolving asset class.

The recent volatility also raised questions about the sustainability of the current price action. Despite reaching a record high, Bitcoin's failure to hold key resistance levels suggests the market may be entering a consolidation phase. Investors are now closely watching upcoming inflation reports and Federal Reserve statements for clearer signals on monetary policy, which will likely dictate Bitcoin's near-term direction [6]. For now, the digital asset appears to have entered a period of uncertainty, with the broader financial markets acting as both a catalyst and a constraint on its price movement.

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[1] Here's Why Bitcoin Has Corrected 4% Despite Reaching ... (https://thecryptobasic.com/2025/08/14/heres-why-bitcoin-has-corrected-4-despite-reaching-an-all-time-high-today/)

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

[3] Stock market today: Live updates (https://www.cnbc.com/2025/08/13/stock-market-today-live-updates.html)

[4] Bitcoin drops after hot wholesale inflation data dampen ... (https://seekingalpha.com/news/4485490-bitcoin-drops-after-hot-wholesale-inflation-data-dampen-fed-rate-cut-bets)

[5] Bitcoin's 5% flash crash to $118k triggers $577 million ... (https://cryptoslate.com/bitcoin-flash-crash-to-118k-triggers-577m-liquidation-in-1-hour/)

[6] Bitcoin Price Slips Away From Record. What Inflation Data ... (https://www.msn.com/en-us/money/markets/bitcoin-xrp-fall-why-cpi-inflation-data-could-halt-the-crypto-rally/ar-AA1KmsLu)