Bitcoin (BTC) and Ethereum (ETH) retreated from record highs amid a broad market correction after hotter-than-expected U.S. Producer Price Index (PPI) data reduced expectations for aggressive Federal Reserve rate cuts. BTC fell over 3% to $115,303, down from an all-time high of $124,436.8, while ETH dropped roughly 4% to $4,270. The PPI surged 0.9% month-on-month in July, far exceeding the 0.2% forecast and marking the largest gain since June 2022, prompting traders to shift from pricing in a 50-basis-point September rate cut to a 25-basis-point reduction with 90% probability.
Matrixport analysts warned on August 18 that BTC broke below a key long-term support trendline, risking a slide toward $112,000 ahead of the Fed's September 17 decision. They described BTC in "no-man's land" between $112,000 and $117,292, advising traders to either buy breakouts above resistance or accumulate near $112,000. The firm dismissed the Jackson Hole symposium as a non-catalyst, redirecting focus to the FOMC meeting.
The downturn triggered $534 million in liquidations across 127,000 traders, with long positions accounting for $447 million in losses. ETH traders absorbed the sharpest blow at $212 million, followed by BTC ($111 million), Solana ($31 million), XRP ($18 million), and Dogecoin ($17 million). By Friday, prices stabilized slightly: BTC steadied at $118,630 (up 0.2%), ETH rose 1.5% to $4,613.64, while XRP traded flat at $3.11 and Solana showed minimal change.