- Bitcoin plunged below $118,000 after hot PPI data sparked heavy liquidations in the market.
- Ethereum stayed near $4,600 as institutional inflows boosted strength against wider volatility.
- Past cycles show altcoins gain when Bitcoin consolidates, raising hope for altseason.
A sudden wave of volatility swept across crypto markets this week. Bitcoin, fresh off a record above $124,000, tumbled below $118,000 after U.S. July Producer Price Index (PPI) data came in hotter than expected. The index rose 0.9% month-over-month and 3.3% year-over-year, fueling inflation concerns and delaying anticipated Federal Reserve easing. The shock led largest long liquidations since early August, wiping out more than $1 billion in leveraged positions.
Bitcoin Faces Sharp Pullback
Bitcoin’s surge to new highs above $124,000 was driven by optimism over September rate cuts, ETF inflows, and growing institutional adoption. Yet Thursday’s reversal to $118,000 was described as “normal” by Wave Digital Assets CEO David Siemer, who called it a recalibration in a bullish trend. He noted Bitcoin remains “firmly entrenched as the anchor of institutional crypto strategies.”
Profit-taking played a major role in the correction. Siemer explained that after the sharp rally, many short-term traders closed positions to lock in gains. The PPI data compounded selling pressure, cooling optimism for near-term rate cuts.
The correction also punished late bulls. CoinGlass reported, over $1 billion in leveraged long positions were liquidated, the largest since the late July–early August plunge when Bitcoin slipped below $112,000. That event also triggered double-digit declines across altcoins, carving out a local market bottom.
Well-followed trader Bob Loukas commented on X that the latest flush was an “I guess opening a 50x long after a 7-day 50% move was not the best idea type of shakeout.
Ethereum Retains Resilience
Ethereum displayed a contrasting performance during the shakeout. On the daily chart, ETH traded at $4,434, sitting just below the 0.786 Fibonacci retracement level at $4,454. That zone has become short-term resistance after ETH touched $4,749 earlier this week.
Source: TradingView
Despite slipping from a steep rising channel, Ethereum still shows resilience. Key support rests at $4,060 and is followed by $3,696, with stronger structural support near $3,371. The MACD indicator holds a positive trajectory at 33.53, as it suggests that its strength is intact.
Ethereum also outperformed Bitcoin on a weekly basis. ETH remained flat near $4,600 while BTC retreated. Over the past seven days, Ethereum gained 22%, positioning itself as the market’s top gainer during heightened volatility.
Santiment said that “the $ETH crowd hasn’t shown nearly as much bullishness despite significantly better performance over the past 3 months.”
Institutional accumulation has added fuel to this resilience. Spot Ethereum ETFs recorded $729 million in net inflows in a single day, lifting multi-billion-dollar inflows this week. Treasury companies have added 2.5 million ETH to reserves since June.
Related: ETH Treasury Firms Rival ETFs, Offer Yield and DeFi Upside
Could Altseason Be Near?
Bitcoin’s weekly chart can be called a consolidation, as it is trading at $117,476 after pulling back from $124,474. Key support rests at the 0.236 Fibonacci level near $117,057, with additional support at $102,350 and $86,424. Resistance remains capped around $130,192. The MACD reading of 775.70 indicates bullish momentum remains despite cooling price action.
Source: TradingView
On the other hand, Ethereum’s stability is being tested by macro factors. The hot July PPI triggered validator exits exceeding 727,000 ETH, worth over $3.2 billion, and a 5% intraday price dip. Still, ETH has maintained strong support levels.
The analysis conducted by Block Scholes reveals that on previous cycles, altcoins jumped when Bitcoin was at its peak. Investors then rotated profits into Ethereum and other tokens as the BTC consolidated. The same can be seen today as Bitcoin consolidates against macro headwinds and Ethereum gathers inflows.
