The start of the new week saw declines in both Bitcoin and Ethereum prices, attributed to unexpected inflation data from the US.
Unexpected Inflation Data
This week, Bitcoin fell by 2% to $115,000, while Ethereum dropped by 3.33% to $4,272. The abrupt price decline was triggered by high inflation rates in the US. The Producer Price Index (PPI) rose by 3.3% year-on-year, affecting market sentiments. Vincent Liu, CIO of Kronos Research, indicated that investor caution increased, leading to diminished expectations for Federal Reserve rate cuts.
Key Support Levels for Bitcoin
Rachael Lucas, an analyst at BTC Markets, identified $115,000 and $112,500 as crucial support levels for Bitcoin. Should these levels be breached, there are risks of a decline to $110,000. The upcoming unemployment claims data set to be released on August 21 is viewed as a key determinant for short-term market direction.
Market Impact of Events
Investor confidence was further shaken by US Treasury Secretary Scott Bessent’s announcement halting strategic Bitcoin acquisitions. However, flows in spot ETFs indicate that current market changes are more about asset relocation rather than a mass exodus.
Recent changes in the cryptocurrency market reflect investors' cautious attitudes in the face of high inflation rates. Expectations for further changes in financial policy and fundamental factors may significantly influence cryptocurrency prices.
