After a strong upward journey that brought Bitcoin to a historic peak of $124,350 mid-week, the market returned to catch its breath with a rapid drop below the $115,000 barrier. The decline was not limited to Bitcoin alone; Ethereum also fell to around $4,330, raising questions: Are we witnessing the beginning of a collapse, or just a natural correction?
First blow: U.S. numbers confuse expectations
The optimism created by positive inflation data quickly dissipated after the producer price index (PPI) showed a higher-than-expected result (0.9% vs. 0.2%).
This figure recalibrated market expectations, as the dollar rose and interest in high-risk assets like cryptocurrencies declined. Hopes for a swift interest rate cut from the Fed diminished, along with the general mood of investors.
Second blow: Mysterious movements of institutions
Major funds like Grayscale and Ark Invest have recorded limited withdrawals, which were considered more of a liquidity restructuring than a mass sell-off.
In contrast, BlackRock funds continued to record positive inflows, confirming that institutions have not lost confidence, but are waiting for stronger signals to regain momentum.
Third blow: Tepid messages from Washington
Statements from the U.S. Treasury Secretary regarding the government's lack of intention to buy Bitcoin at present were a psychological slap to the market. Anticipation increased further with the upcoming Jackson Hole meeting and the release of expected unemployment data at the end of the week.
Is danger imminent?
Despite a drop of about $9,000, Bitcoin remains above the upward trendline. The real risk begins if the price clearly breaks the $115,000 level, at which point we may see tests of the $112,500 and possibly $110,000 areas.
But so far, indicators such as the Fear & Greed Index (stable at 56) reflect a state of neutrality, suggesting that what is happening is more like a temporary pause after a strong rise, rather than a complete collapse.
The coming days, especially with U.S. economic data, will determine whether Bitcoin is preparing for a new bull run or further correction.
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