Bitcoin (BTC) slipped below $113,000 in mid-week trading as investor profit-taking and rising U.S. inflation concerns sparked fresh volatility across crypto and equity markets.
The world’s leading cryptocurrency has struggled to hold momentum after a four-month rally, closing below the 50-day Exponential Moving Average (EMA) of $114,903 for the first time since April. Despite surging more than 66% from its yearly lows, Bitcoin encountered strong resistance near $125,000, signaling fatigue among bullish traders.
U.S. Inflation Data Weakens Market Sentiment
Expectations for aggressive interest rate cuts by the Federal Reserve were tempered after the U.S. Producer Price Index (PPI) showed stronger-than-expected inflation data. The report dampened risk appetite, triggering broad sell-offs in both the cryptocurrency sector and U.S. tech stocks.
This shift intensified Bitcoin’s pullback, pushing prices to an overnight low of $112,580, nearly a 9.5% drop from last week’s high of $124,517. Alongside BTC, Ether (ETH) also fell into a key support range between $4,000 and $4,100.
Adding to concerns, over $500 million worth of Bitcoin liquidations were recorded in just 24 hours, raising fears that leveraged positions are accelerating the decline. Analysts warn that Bitcoin is nearing a critical support level of $112,000, which could determine its short-term direction.
Technical Outlook: Bearish Signals Emerge
Bitcoin’s Relative Strength Index (RSI) currently stands at 41, below the neutral threshold of 50, indicating bearish momentum. The Moving Average Convergence Divergence (MACD) also signaled a bearish crossover, hinting at further downside pressure.
Despite gold soaring to record highs amid central bank buying and geopolitical uncertainty, Bitcoin remains closely tied to risk-driven assets, mirroring the sell-off in overvalued technology stocks.
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Institutional Influence and Market Resilience
Even with the current correction, Bitcoin has shown resilience in 2025, climbing from $81,975 in February to current levels above $113K. Institutional investors continue to play a key role, with evidence of distribution near cycle highs.
BTC’s market dominance sits at 58%, slightly lower as altcoins gain traction during institutional selling phases. With a market capitalization of $2.26 trillion, Bitcoin retains its leadership position despite declining volumes, which dropped to $66 billion this week.
Experts suggest the pullback represents healthy consolidation rather than panic selling, as Bitcoin prepares for its next cycle amid shifting macroeconomic conditions.
The upcoming Federal Reserve meeting in September is expected to be a decisive factor for Bitcoin’s trajectory, potentially reshaping its reputation as “digital gold” in uncertain markets.
