Stronger-than-expected CPI and PPI readings trigger sharp BTC sell-off from resistance zone.
Bitcoin fell sharply on Thursday, dropping below the $119,000 level after hotter-than-expected US inflation data rattled risk assets. The move came just hours after the release of Consumer Price Index (CPI) and Producer Price Index (PPI) figures, which signaled that inflationary pressures remain persistent, dampening investor sentiment across crypto and equity markets.
The BTC/USD pair touched an intraday high near $123,239, a key resistance zone marked by heavy selling pressure, before reversing sharply. By midday, prices had broken below $119,000, erasing earlier gains. The sell-off was accompanied by a spike in trading volume, indicating heightened market activity and profit-taking.
Technical charts show Bitcoin had been consolidating above $121,000 earlier in the week, repeatedly testing the upper resistance band. The rejection from this area coincided with the release of inflation data showing CPI and PPI both exceeding forecasts, raising concerns that the Federal Reserve could keep interest rates elevated for longer.
“This drop was a textbook reaction to macroeconomic headwinds,”According to BITX market analyst. “When inflation data comes in hotter, traders tend to rotate out of risk assets like Bitcoin, especially when prices are sitting at major resistance levels.”
The next major support zone sits between $111,000 and $113,000, an area where buying previously stepped in during early August. A sustained break below current levels could open the door to a deeper retracement toward that green support band highlighted on the chart.
Meanwhile, some traders are watching for potential recovery signs if Bitcoin can reclaim the $121,000-$123,000 range. “If BTC can close back above resistance, it would suggest that the selling was more of a knee-jerk reaction than the start of a broader correction,” According to BITX strategist noted.
With macroeconomic pressures now in sharper focus, market participants will be closely monitoring upcoming economic data releases and Fed commentary for clues on interest rate policy. For now, Bitcoin remains vulnerable to further downside unless buyers reassert control above $120,000.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.