Bitcoin fell below $113,000 during mid-week trading, as profit-taking in the cryptocurrency market coincided with a broader sell-off in technology stocks and renewed concerns over U.S. inflation.
The flagship cryptocurrency, which had been trading along an upward trendline since early April, closed below its 50-day Exponential Moving Average (EMA) of $114,903 for the first time in weeks. The move marks Bitcoin’s first monthly loss since March, following a four-month rally that saw the asset surge 66% from its 2025 lows to its recent peak of $124,517 on August 14.
Inflation Data Weighs on Risk Appetite
Market sentiment shifted after a stronger-than-expected U.S. Producer Price Index (PPI) report dampened expectations of aggressive interest rate cuts later this year. The data triggered a pullback across risk assets, with Bitcoin and high-growth tech stocks among the hardest hit.
On Tuesday night, Bitcoin slumped to an intraday low of $112,580—down 9.5% from last week’s record high. Ether also slid into a key support range between $4,000 and $4,100, highlighting the broad sell-off across the digital asset sector.
Analysts noted that approximately $500 million worth of Bitcoin positions were liquidated in a single day, adding further pressure on prices. Traders are now closely watching the $112,000 support level, with many warning that a break below could fuel additional volatility.
Technical Indicators Signal Weakness
Bitcoin’s Relative Strength Index (RSI) slipped to 41, below the neutral 50 threshold, suggesting bearish momentum. The Moving Average Convergence Divergence (MACD) also showed a bearish crossover, reinforcing signs of downward pressure.
Despite global geopolitical tensions and rising central bank demand pushing gold to new highs, Bitcoin remains strongly correlated with risk-sensitive assets, limiting its appeal as “digital gold” in the current environment.
Institutional Support Still Intact
Industry analysts stress that the current correction reflects profit-taking and institutional distribution rather than a collapse in fundamentals. Bitcoin has climbed nearly 39% since August lows, with its market capitalisation still standing at $2.26 trillion and dominance at 58%—though slightly lower as altcoins gain ground.
The pullback comes as trading volumes eased to $66 billion, suggesting consolidation rather than panic selling. Analysts say institutional investors often book profits at cycle highs, creating temporary headwinds.
Attention now turns to the U.S. Federal Reserve’s September meeting and Fed Chair Jerome Powell’s remarks at the Jackson Hole Economic Symposium later this week. Traders are bracing for policy cues that could determine whether Bitcoin stabilises at current levels or faces further downside.
