Bitcoin Price Falls From Record High on Hot Inflation Data
BTC drops below $118K after hitting $124,450 as July PPI jumps 0.9%, cooling Fed cut odds while ETF demand and corporate holdings support prices | That's TradingNEWS
From Record Highs to Sharp Pullback in Bitcoin (BTC-USD)
Bitcoin’s August 2025 trading session delivered extreme volatility, with BTC-USD rocketing to an all-time high of $124,450, lifting market capitalization above $2.46 trillion and briefly surpassing Alphabet (GOOG) to become the fifth-largest global asset. The euphoria was short-lived as aggressive profit-taking and macro headwinds sent prices tumbling below $118,000, erasing over $930 million in leveraged positions and liquidating more than 207,000 trades. The $6,500 swing underscored Bitcoin’s sensitivity to both technical price levels and macroeconomic news.
U.S. Inflation Data Resets Federal Reserve Rate Cut Odds
A hotter-than-expected Producer Price Index print jolted risk markets, with July PPI jumping 0.9% month-on-month—its largest surge since June 2022—and rising 3.3% year-on-year versus expectations of 0.2%. The surprise spike erased the market’s minor expectations for a 50 bps Fed rate cut, with CME FedWatch showing 0% probability, while a 25 bps cut in September held at 92.7% odds. Higher Treasury yields immediately pressured high-beta assets like Bitcoin, reversing earlier gains and tempering bullish momentum.
ETF Inflows Intensify Bitcoin Supply Shock
Institutional demand through spot Bitcoin ETFs is reshaping the market’s supply structure. BlackRock’s iShares Bitcoin Trust (IBIT) now commands $90 billion AUM, with a single-day net inflow of $111 million. Across the ETF sector, funds collectively hold 1.48 million BTC valued at over $170 billion, locking up supply at a pace far exceeding post-halving issuance. Net inflows for 2025 have already reached $14.8 billion, creating a persistent shortage that amplifies upward moves when demand spikes.
Corporate Treasuries Expand Bitcoin Holdings
MicroStrategy (MSTR) increased its BTC reserves by 21,021 BTC worth $2.46 billion, bringing total holdings to 628,800 BTC—valued at more than $76 billion. Over 200 public companies now hold crypto on their balance sheets, with 64 integrating Ethereum (ETH-USD) as well. This shift reflects a broader strategic use of Bitcoin as a liquidity buffer and inflation hedge, embedding crypto deeper into corporate finance models.
401(k) Access Opens $12.5 Trillion Market
The Trump administration’s executive order permitting 401(k) allocations to crypto unlocks a potential $12.5 trillion retirement pool. While the capital inflow will be gradual, it marks a transformative step for mainstream adoption, especially alongside the administration’s U.S. Strategic Bitcoin Reserve and Digital Asset Market Clarity Act, which provide regulatory confidence for retirement portfolio managers.
Technical Structure Points to Potential Breakout
Bitcoin’s chart shows a bull flag pattern forming after a breakout above $117,000, with potential upside targets at $127,500, $131,500, and $136,900. The MACD is close to a bullish cross, and ascending diagonal support lines continue to generate higher lows. However, the RSI on multiple timeframes hovers around 70–72, signaling near-term overbought conditions. The “9th TD Sell” signal on the daily chart warrants caution, but funding rates remain modest, indicating that the rally is not yet in the danger zone of excessive leverage.
Liquidation Clusters Could Fuel Rapid Price Moves
Heat maps reveal dense short positioning between $118,000 and $121,000, with potential forced buying worth up to $14 billion if Bitcoin breaks decisively above $125,000. A move past that threshold could quickly catapult prices toward $130,000–$137,000. On the downside, holding $115,000–$116,000 is critical; a break below could open the door for a slide to $110,000, where major historical demand resides.
Altcoins See Mixed Performance Amid Bitcoin Volatility
The total crypto market cap briefly topped $4 trillion before pulling back. Altcoins faced sharper corrections: Ethereum (ETH-USD) fell 2.3% to $4,577, Solana (SOL-USD) slipped 2.9%, XRP (XRP-USD) dropped 5.1%, and Dogecoin (DOGE-USD) fell 7.7%. Spot ETH ETFs saw $2.3 billion in inflows, including a record $1 billion single-day haul, underscoring institutional diversification into non-Bitcoin assets.
Forecasts Remain Aggressively Bullish
Despite short-term volatility, high-profile projections remain elevated: Standard Chartered targets $200,000 by year-end, Arthur Hayes sees $250,000 under renewed QE, PlanB’s Stock-to-Flow model implies a $500,000 average for 2025, and Cathie Wood’s ARK Invest holds a $1 million five-year target. In the near term, reclaiming $124,500 could spark moves toward $130K–$137K, while a sustained break below $116K may pause the rally before another institutional push higher.
Verdict: Buy on Pullbacks, Hold for Breakouts
Given the supply squeeze from ETF flows, corporate accumulation, and potential retirement fund exposure, the medium-term outlook for BTC-USD stays bullish. Short-term traders should watch for overbought reversals, but long-term positioning favors accumulation during dips and holding through confirmed breakouts above $125,000.
