rewrite this title Bitcoin Sinks as Concerns Over Inflation, Economic Data Mount – Decrypt

Bitcoin sank below $113,000 for the first time since August 2, as investors, fretful about inflation, tariffs, and geopolitical unrest, shied away from cryptocurrencies and other risk-on assets. 

Bitcoin has been swooning since reaching a record high of $124,128 last Thursday. Ethereum, which neared its own all-time high less than a week ago, was changing hands at about $4,100, down 4.6% from Monday, while XRP and Solana fell 6.7% and 3.5%, respectively.

The largest crypto by market value was recently trading at $113,200, down 2.5% over the past 24 hours.



“The pullback looks like a mix of macro jitters and positioning after the recent run-up,” Joe DiPasquale, CEO of crypto asset manager BitBull Capital, wrote to Decrypt. “Rising Treasury yields and some stronger-than-expected U.S. economic data have taken a bit of air out of risk assets broadly, and crypto is no exception.”

Tuesday’s drop dovetailed with wider declines in equities and other risk-on assets ahead of key jobs and economic reports that may influence the U.S. central bank’s next decision on interest rates.

The Trump Administration has been pressuring the Federal Reserve to lower interest rates. Still, a majority of bankers remained steadfast in keeping rates intact, with inflation ticking upward in recent months and amid worrying signs about the impact of the Trump Administration’s trade war. 

On Wednesday, the Fed will release minutes from its last monetary policy meeting in which two directors dissented from the bank’s decision to keep interest rates intact between 5.25% and 5.50%.

The dissent was the first of its kind since 1993. Markets will be looking anxiously at unemployment claims and key manufacturing reports on Thursday and remarks by Fed Chair Jerome Powell on Friday at the annual Economic Policy Symposium in Jackson Hole, Wyoming, for encouraging signs that could precede a rate cut. 

Last Tuesday, the Consumer Price Index for July inched up to 2.7% on an annual basis, better than economists predicted, but still well above the U.S. central bank’s long-stated 2% goal. Moreover, core prices, which strip out more volatile energy and food products, rose to 3.1%. 

The bank has left rates untouched since a .50% hike last December, a departure from expectations at the beginning of the year. In comments following the decision, Federal Reserve Chair Jerome Powell said that current inflation readings were “little changed from the beginning of the year,” but noted that despite the drop-off in services inflation, “increased tariffs are pushing up prices in some categories of goods.”

Major stock indexes continued their downturn with the S&P 500 and tech-heavy Nasdaq declining 0.6% and 1.4%, respectively.

In a message to Decrypt, Bitwise Investments Senior Investment Strategist Juan Leon wrote that profit taking from last week’s all-time high was leading to “cascading liquidations from leveraged trades.”

Investors have closed $559 million in positions, including $487 million of longs, according to data provider CoinGlass. 

“Additionally, equities and other risk assets sold off today, so Bitcoin is being pressured by macro risk off as well,” Leon added. It’s testing short-term support levels, so we’ll see if it bounces or momentum breaks down.”