Bitcoin hits new high, then drops as U.S. inflation data shakes trader confidence.
- Bitcoin climbed to $124,000 but pulled back to $117,600.
- Traders react to surprise inflation data and policy changes.
- Upcoming retail data and options expiry may impact next moves.
Bitcoin Hits Another High, Then Falls
Bitcoin reached $124,000 on Thursday, its highest level ever. But it didn’t stay there. It dropped back to $117,600 after the release of new U.S. inflation data. This fall closed a CME futures gap, a price difference that happens because the futures market closes on weekends while bitcoin trades 24/7.
This is not the first time bitcoin has pulled back after a new high in 2025. In fact, each time it has reached a new record this year, the drop that follows has been getting smaller. In January, it dropped 30%. In May, only 12%. In July, just 9%. And now, after reaching $124,000, it has dropped only 7% so far.
Inflation and Policy Are Moving the Market
The drop in bitcoin’s price came after a U.S. Producer Price Index (PPI) report showed higher-than-expected inflation. This spooked investors, especially because Treasury Secretary Scott Bessent recently changed his position on buying bitcoin for the U.S. reserve, now pausing those efforts. These moves made investors unsure about future government support for bitcoin.
What Happens Next?
Traders are now looking at Friday’s U.S. retail sales report. If sales are strong, it might make the Federal Reserve think twice about cutting interest rates in September. That could affect demand for assets like bitcoin. The forecast is for a 0.7% increase in sales, which would be the best since March.
There’s also a big date coming up at the end of August. On August 30, $12 billion in bitcoin options are set to expire. Many of these are bets that bitcoin will trade between $120,000 and $124,000. If prices hold near those levels, many traders will profit. If not, the market could see more sudden changes.
Source: coindesk.com
