Bitcoin slides to $115,500 as macro data continues to dampen market sentiment

Bitcoin and ether dropped to notable lows on Sunday as last week’s hotter-than-expected U.S. macro data continued to weigh down on investor confidence.

According to The Block’s crypto price page, bitcoin fell 2% in the past day to trade at $115,500. Earlier in the day, the cryptocurrency fell as low as $115,046. It is down 7.5% from its all-time high record of around $124,350 on Wednesday. Ether is also down 3.33% to trade at $4,329.

“Bitcoin’s recent dip reflects cautious investor sentiment amid hotter-than-expected U.S. inflation,” said Vincent Liu, CIO at Kronos Research. “Higher inflation reduces hopes for Fed rate cuts, strengthens the dollar, and fuels risk-off behavior.”

Bitcoin’s all-time high rally, spurred by cooler-than-expected U.S. consumer price index data, was cut short when the following producer price index for July came in at a 3.3% year-over-year growth, which is higher than previously expected.

This likely dampened investor hopes for a possible interest rate cut in September, analysts told The Block.

“Traders are holding back, waiting for clearer macro and crypto signals before re-entering the market,” Liu said.

Further undermining confidence was the U.S. Treasury Secretary Scott saying that the government will not be purchasing bitcoin for its strategic reserve, but rather explore a more “budget-neutral” way to expand the reserve.

CoinMarketCap’s fear and greed index shows a 56, meaning that crypto investors are in a “neutral” state.

However, BTC Markets Crypto Analyst Rachael Lucas said spot ETF flow data suggests that the market downturn is more about capital rotation rather than collapsing conviction.

Last Friday saw funds leaving from Grayscale and Ark Invest’s bitcoin ETF, while BlackRock’s IBIT continued to attract net inflows. Spot ether ETFs showed a similar trend, according to SoSoValue data.

“While daily flows dipped modestly overall, the breadth of institutional engagement remains substantial, suggesting investors are consolidating into lower-cost products rather than exiting the market altogether,” Lucas noted.

The BTC Markets analyst said current key support levels are the $115,000 and the $112,500 zone, where a break below these levels could risk a move towards $110,000.

Analysts agree that the next major market catalyst will remain a U.S. macroeconomic event.

“Attention now turns to the Fed’s Jackson Hole Symposium this week, where a dovish tone could reignite risk appetite,” Lucas said. “Sustained ETF inflows and corporate allocations will also provide a floor.”

Kronos’ Liu said the initial jobless claims data, scheduled for release on Aug. 21, will also serve as a key factor in the next price move.