Crypto markets faced renewed pressure on Friday with Bitcoin and Ethereum leading a broad sell-off, as U.S. inflation data unsettled traders and dampened hopes for rapid rate cuts. The Federal Reserve’s preferred gauge, the personal consumption expenditures (PCE) index, showed core inflation rising to 2.9% annually in July.
According to the PCE Index, that was up from 2.6% and marked the highest since December 2024. On a monthly basis, the index climbed 0.3%, signaling steady price pressures despite expectations of moderation.
The global crypto market cap dropped to $3.76 trillion, down 4.11% in one day. Trading volume surged 10.33% to $191.85 billion, showing heightened activity as volatility spiked. Bitcoin slipped 4.08% to $108,402, with trading volume near $68 billion. Ethereum dropped harder, losing 6.09% to $4,297.50 on $42.8 billion volume.
Markets now weigh inflation risks against weakening labor data, with most analysts still expecting a September rate cut. “The Fed opened the door to rate cuts, but the size…depends on whether labor-market weakness continues,” said Ellen Zentner of Morgan Stanley.
Bitcoin Faces Critical Ichimoku Level
Bitcoin also sits near a decisive technical level. Titan of Crypto noted BTC must reclaim the Tenkan line to maintain upward momentum. Failing this, the Kijun baseline offers the next safety net. His Ichimoku outlook highlights $115,000 as the “level to watch.” Holding above that strengthens the bullish trend.
However, losing it could expose downside risk toward $95,000. Hence, Bitcoin’s near-term path hinges on whether traders lean on inflation fears or labor weakness.
Ethereum Eyes Key Supports
Ethereum is consolidating after facing resistance near $4,960, close to its 2021 peak. According to a crypto investor, de Bitcoin Consultant, ETH remains within a tight range between $4,111 and $4,851. Additionally, Fibonacci retracement levels suggest that $4,157 and $3,691 could be potential supports.
Therefore, an uptick could set the stage for a new advance to $6,000. In addition, the RSI levels suggest that ETH is retracting from an overbought area. In the past, a divergence led to a steep drop of 26%, yet the present pattern implies a steadiness within a longer-term accumulation of a bullish trend.
Sticky inflation revived caution in crypto markets, yet strong support levels suggest correction rather than collapse for Bitcoin and Ethereum.
Also Read: CoinShares Reports $32.4M Q2 Profit Amid Crypto Gains
