Bitcoin Dips below $118K on New Inflation Data
Bitcoin's value has dropped more than 5% in the last couple days as a result of high inflation and news from the US Treasury.
Quick overview
- U.S. producer prices rose by 0.9% in July, significantly higher than the expected 0.2%.
- Bitcoin's price has dropped to $117,973 after recently reaching a new all-time high, falling over 5% in just two days.
- The decline in Bitcoin's value has raised concerns among investors, especially as it fell below the critical $119K support level.
- The crypto market experienced over a billion dollars in liquidations due to negative inflation data and comments from U.S. Treasury Secretary Scott Bessent.
U.S. producer prices are up by 0.9% and Bitcoin (BTC) is down, dropping to $117,973 (BTC/USD) after just recently setting a new all-time high.
Bad news for Bitcoin investors today as BTC’s price fell under $118K and is not holding as steady as expected. It looks like it could be a while before Bitcoin sets a new record high thanks to higher than expected inflation.
The U.S. Labor Department reported that producer prices were up by 0.9% for July, which was higher than the anticipated 0.2%. While some consumer goods prices have fallen in July, this particular metric of inflation has been bad enough to scare investors off of Bitcoin. Since Bitcoin hit a new high two days ago, its value has fallen more than 5%.
What is particularly alarming about this drop for investors is that the price of BTC has fallen below the $119K support level. Unless the price moves back up to that mark, more investors may bail on Bitcoin in the coming days.
Major Liquidations for the Crypto Market
As the inflation data came in a bit hotter than expected, more than a billion dollars in cryptocurrency were liquidated. This happened after U.S. Treasury Secretary Scott Bessent said that the government has no plans to buy Bitcoin right now.
That double whammy for the market drove selling pressure high and has led to one of the steepest declines in weeks. Much of the crypto market is down now compared to where it was 24 hours ago. These are not major declines in most cases, with the majority of cryptos falling between 1% and 3% in that period.
With the state of inflation worse than anticipated, there is fear that the economy may struggle to improve over the next month, especially with many of Donald Trump’s new tariffs taking effect. The crypto market could be in for a rough August until some positive inflation data appears.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save