Bitcoin slides to $115,500 as macro data continues to dampen market sentiment

Bitcoin and Ether Retreat as Inflation Data Pressures Market Sentiment

Bitcoin (BTC -2.14%) and ether slipped to notable lows on Sunday as hotter-than-expected U.S. economic data weighed on investor confidence.

According to The Block’s crypto price page, bitcoin dropped 2% in the past 24 hours to $115,500 after briefly touching $115,046 earlier in the day. The asset is now down 7.5% from its record high of $124,350 reached last Wednesday. Ether followed suit, declining 3.33% to $4,329.

“Bitcoin’s pullback reflects cautious sentiment amid stronger U.S. inflation,” said Vincent Liu, CIO at Kronos Research. “Higher inflation reduces the likelihood of Fed rate cuts, strengthens the dollar, and encourages risk-off positioning.”

Bitcoin’s record-setting rally had been fueled by softer U.S. consumer price index data, but optimism faded after July’s producer price index showed a 3.3% year-over-year increase, exceeding forecasts. Analysts said this dampened hopes for a possible September rate cut.

Investor confidence took another hit when U.S. Treasury Secretary Scott clarified that the government will not purchase bitcoin for its strategic reserve, opting instead for a “budget-neutral” strategy.

Still, some analysts view the downturn as a rotation rather than a loss of conviction. BTC Markets crypto analyst Rachael Lucas pointed to ETF flow data showing funds leaving Grayscale and Ark Invest’s bitcoin ETFs, while BlackRock’s IBIT continued to attract inflows. Spot ether ETFs showed a similar consolidation trend.

“While daily flows have dipped slightly, institutional engagement remains strong. Investors appear to be shifting toward lower-cost products rather than exiting the market,” Lucas noted.

Key support levels for bitcoin are currently at $115,000 and $112,500, with a break below those zones potentially opening the door to $110,000.

Looking ahead, analysts expect the next major catalyst to be U.S. macroeconomic events. “Attention now turns to the Fed’s Jackson Hole Symposium this week,” Lucas said. “A dovish tone could spark renewed risk appetite, while sustained ETF inflows and corporate allocations should help provide a floor.”

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