On August 18, 2025, Bitcoin dropped below $115,000. The cryptocurrency lost more than 7% from the recently reached all-time high of $124,500. Along with BTC, other cryptocurrencies, including Ethereum, also declined.
Experts note that the fall was caused by a combination of macroeconomic factors, technical signals, and the behavior of major players. Here’s what market participants now expect from BTC and whether long-term investors should be worried.
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Macroeconomic Background
The main driver of the decline was fresh statistics from the U.S. The Producer Price Index for July rose by 3.3%, which was higher than expected and cooled hopes for a quick rate cut by the Federal Reserve. Before the release of the latest data, chances were as high as 98%. At the time of writing, market participants estimate the probability of a Fed rate cut in September at 82%.
Fed rate forecast for September. Source: CME
Higher inflation strengthens the dollar and reduces investor appetite for risky assets, including cryptocurrencies. Therefore, Bitcoin reacted to the negative news with a decline.
Bitcoin chart. Source: TradingView
Now the market’s attention is focused on two events:
- The Jackson Hole Symposium, August 21–23, 2025.
- Weekly unemployment claims data. The statistics are released every Thursday. The next publication is on August 21, 2025.
The rhetoric of Fed Chair Jerome Powell, whose key speech is expected on August 22, 2025, will determine Bitcoin’s further dynamics. Unfortunately, the banker has repeatedly made it clear that he dislikes the inflation situation in the country. Powell believes that the tariff war unleashed by Trump negatively affects the U.S. economy. Therefore, until the U.S. president reaches agreements with other countries and the risks of a new confrontation disappear, the Fed will be cautious in making rate decisions.
Investors Lock In Profits
According to GlassNode data, over the weekend investors locked in more than $3.5 billion in profits, with $3.3 billion in a single day. This is the largest figure since July.
Realized profit and loss. Source: GlassNode
A series of four all-time highs for Bitcoin in 2025 was accompanied by sequential corrections. Notably, the pullbacks are becoming less deep:
- January — a 30% drop;
- May — 12%;
- July — 9%;
- August — about 8%.
Such changes may indicate a gradual “maturing” of the market. Volatility often declines as an asset’s market capitalization grows, making its price “less agile.”
Technical Analysis
Analysts highlight several alarming technical signals:
1. Analyst Captain Faibik pointed out a “rising wedge” on Bitcoin’s daily chart. It indicates a possible decline into the $98,000–$100,000 area. If selling intensifies, targets may shift toward $88,000.
2. Swissblock noted that a “double top” is forming on the cryptocurrency’s chart. Current behavior resembles 2021, when two peaks were followed by a deep crash. This suggests a potential move toward $94,700.
Key support levels remain at $115,000 and $112,500. A break below would open the way to $110,000 and lower.
What’s Going On with Institutions and Whales
Data on flows into spot ETFs show that investors are not leaving the market but reallocating capital:
- Outflows were recorded at Grayscale and Ark Invest;
- BlackRock continues to attract net inflows.
Spot Bitcoin ETF inflows/outflows. Source: The Block
Blockchain analysis shows that whales with more than 1,000 BTC in their wallets have begun to cut positions. They are taking profits at the peaks. Such behavior by large investors has increased pressure on the price.
Changes in the balances of whales holding more than 10,000 bitcoins. Source: GlassNode
Manipulation and “Buying the Dip”
Some traders believe the drop is artificial. The assumption is based on statistics indicating that many large players are buying cryptocurrency at the lows. This has led to speculation about market manipulation. Proponents of the theory believe that institutions are trying to acquire as many coins as possible at a favorable rate.
BTC and the Cyclicality Theory
Historical observations show that Bitcoin tends to set a cyclical high roughly a year and a half after the halving. If history repeats, the peak could be recorded in fall 2025.
Bitcoin’s behavior by cycles. Source: bitcoincyclescomparison
Summing Up
Bitcoin’s drop below $115,000 in August 2025 was caused by a combination of factors, including a loss of confidence by some investors in a September Fed rate cut, as well as selling by major market participants.
The technical picture does not rule out a continuation of the correction. At the same time, the still-high probability of a Fed rate cut in September and BTC’s position in the cycle suggest that another leg of the bull run may follow the pullback.
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