according to the website - By COINTURK NEWS
With the start of a new week, Bitcoin fell by 2%, dropping to $115,000. Ethereum followed suit, dropping by 3.33% to $4272. After reaching a historic high of $124,350 on Wednesday, the main factor hindering Bitcoin's growth was U.S. inflation data that exceeded expectations. The CoinMarketCap 'Crypto Fear and Greed' index stands at 56, indicating neutral market sentiment.
Inflation surprise undermines risk appetite
Vincent Liu, CTO of Kronos Research, explained the decline with increased caution caused by unexpectedly high inflation data. The Producer Price Index rose by 3.3% year-on-year in July, quickly curbing the rally driven by previously weak Consumer Price Index (CPI) data. Expectations for a Federal Reserve rate cut have diminished, the dollar has strengthened, and risk aversion has increased. Analysts emphasize that hopes for a rate cut in September have not materialized.
According to Liu, investors are waiting for clearer signals on both macroeconomic and cryptocurrency fronts. Data on unemployment claims, which are due to be released on August 21, are considered a key factor determining short-term dynamics.
Additionally, confidence has weakened following U.S. Treasury Secretary Scott Bessen's statement that strategic Bitcoin acquisitions for reserves will not be made, and current assets will be retained. Bessen noted that budget-neutral options for expanding reserves will be considered, indicating that demand for Bitcoin from the government is not currently being considered.
Rachel Lucas, an analyst at BTC Markets, emphasized that the inflow of funds into spot ETFs indicates a movement rather than an outflow. On Friday, Grayscale and Ark Invest observed outflows from their Bitcoin ETFs, while BlackRock's IBIT product continued to attract a net inflow of funds. SoSoValue data indicated a similar trend in Ethereum spot ETFs, indicating consolidation into cheaper products while maintaining interest from institutional investors.
From a technical perspective, Lucas identified the $115,000 and $112,500 zones as critically important support levels. She warned that a sustained drop below these levels could create risks of a move down to $110,000.
The next important factor in the cryptocurrency market is expected to be the symposium in Jackson Hole. Soft statements from Federal Reserve Chairman Jerome Powell could increase risk appetite. According to Lucas, the ongoing inflow of funds into ETFs and institutional capital provides a fundamental basis for pricing.
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