Bitcoin experienced a sharp decline, dropping below $113,000 during mid-week trading, as investors cashed in profits amid growing concerns over U.S. inflation and a broader sell-off in technology stocks. The cryptocurrency, which had surged 66% in 2025, faced resistance at $125,000 last week and closed below its 50-day Exponential Moving Average of $114,903, signaling bearish momentum.
The downturn follows a robust U.S. Producer Price Index (PPI) report, which tempered expectations for aggressive Federal Reserve interest rate cuts by year-end, dampening risk appetite in cryptocurrency markets. Bitcoin’s Relative Strength Index (RSI) fell to 41, below the neutral 50 mark, while the Moving Average Convergence Divergence (MACD) showed a bearish crossover, indicating a weakening trend. The decline mirrors a broader sell-off in tech stocks, with Bitcoin dropping 9.5% from its recent peak of $124,517 on August 14 to an overnight low of $112,580. Ether also fell, entering a support range of $4,000–$4,100.
The market saw $500 million in Bitcoin liquidations in a single day, raising concerns as the cryptocurrency nears a critical support level around $112,000. Despite the pullback, analysts view it as a correction rather than a collapse, following a 39% rise from August lows. Bitcoin’s market dominance stands at 58%, slightly down due to institutional selling, with its market capitalization at $2.26 trillion despite a drop in trading volume to $66 billion.
Institutional support remains strong, with Bitcoin’s 2025 growth from $81,975 in February driven by significant inflows. However, the recent sell-off in overvalued tech stocks, closely tied to cryptocurrencies, has amplified volatility. Traders are now focused on the Federal Reserve’s September meeting, which could influence Bitcoin’s trajectory. While geopolitical tensions have pushed gold to record highs, Bitcoin’s correlation with riskier assets has challenged its “digital gold” narrative, prompting caution among investors navigating this turbulent market.
