Bitcoin drops to $ 115,000

On Sunday evening, August 17, bitcoin BTC $115,318.76 Bitcoin -2.40% Market capitalization $2.3 trillion VOL. 24 hours $1.58 billion dropped to $ 115,500 and ethereum ETH $4,278.27 Bridged Ether (StarkGate) -4.82% Market capitalization $0.11 billion VOL. 24 hours $3.1 billion dropped to $ 4,330 amid weaker expectations for a Fed rate cut next month. Last week’s US macro data, which turned out to be hotter than forecast, cooled investor optimism. According to The Block, the flagship of the crypto market fell by 2% per day and hit a low of $ 115,046. This is 7.5% lower than the record high of about $ 124,350 recorded last Wednesday. Ether lost more than 3% and traded at $ 4,329.

«The recent decline in bitcoin reflects cautious investor sentiment amid higher-than-expected inflation in the United States,» said Vincent Liu, CIO at Kronos Research. According to him, higher inflation reduces the likelihood of a Fed rate cut, strengthens the dollar and encourages a move away from risky assets. Bitcoin’s rally, which began after «cool» consumer inflation data, was cut short after the publication of the July producer price index, which rose by 3.3% year-on-year.

An additional pressure factor was the decision of US Treasury Secretary Scott not to use bitcoin for the country’s strategic reserves. He explained that the government is looking for a more «budget-neutral» way to expand them. CoinMarketCap’s Fear and Greed Index is currently at 56, which indicates a «neutral» market condition.

At the same time, according to BTC Markets analyst Rachel Lucas, the outflow of capital from crypto funds is more indicative of asset rotation than a loss of faith in the market. Last Friday, Grayscale and Ark Invest bitcoin ETFs saw outflows, while BlackRock’s IBIT continued to attract investments. Similar trends are observed among ether ETFs. «Institutional activity remains strong, and investors are consolidating into lower-cost products rather than exiting the market entirely,» Lucas said.

The key support levels for bitcoin are currently $ 115,000 and $ 112,500, which, if broken, could push the quotes to $ 110,000. Analysts agree that macroeconomic events in the United States will be the next catalyst for the market. Among them are this week’s Jackson Hole symposium, which, if the Fed’s rhetoric is «soft,» could restore risk appetite, as well as the publication of data on initial jobless claims on August 21.