Bitcoin Tanks 5.86% On Hot PPI Data & Treasury Secretary's Remarks

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After rebounding from the $112,00 level, Bitcoin has shown a strong recovery. The leading digital asset hit a fresh all-time high of $124,500 on Thursday. However, it failed to close above $123,200 resistance and dropped on the news of hot PPI data. The sell-off further intensified after the Treasury Secretary’s remarks on Bitcoin Strategic Reserve (BSR).

The downward push also filled the CME gap that was present above $116,800. A breakdown below this level might put a retest of the range lows around $114,700. While the recent sell-off could result in a few days of downtrend of consolidation, the broader outlook remains bullish on the pioneering digital asset, with analysts putting $150-200k targets for the end of the year.

Bitcoin’s TM Grade remains bullish at 90.71%. Even though it has lost some momentum in the last 24 hrs, the fundamentals and technicals remain strong.

U.S. Treasury Secretary Scott Bessent recently clarified that the government will not be acquiring additional Bitcoin for its Strategic Bitcoin Reserve. Despite prior speculation, Bessent confirmed that no new purchases are planned, and the reserve, which is valued between $15 billion and $20 billion, will be built solely through seized assets.

This decision aligns with the Trump administration’s stance, which mandated the government to retain confiscated Bitcoin rather than purchase new assets. The U.S. Treasury has emphasized that these Bitcoin holdings will not be sold, ensuring that any gains will be maximized through the retention of existing seized digital assets.

This announcement puts an end to rumors about the potential for the government to buy Bitcoin directly, focusing instead on the continued use of confiscated assets as the cornerstone of the reserve. The reserve’s future will depend heavily on the ongoing forfeiture of Bitcoin from criminal activities.

In July 2025, U.S. wholesale prices rose by 0.9%, marking the largest monthly increase in over three years. The surge in the Producer Price Index (PPI) signals growing inflationary pressures across the economy. Year-over-year, wholesale inflation spiked to 3.3%, the highest in five months, largely driven by increased costs in food and metals.

Economists attribute this rise to tariffs imposed during the Trump administration, which have continued to escalate production costs. As businesses face higher expenses for raw materials, the impact on the cost of goods and services becomes more apparent. The PPI figures suggest that inflation is not only impacting consumers but also businesses, which could lead to higher prices for finished goods in the coming months.

The July PPI report has raised concerns among market analysts, as it suggests that inflationary pressures may impact the Fed’s decision to cut interest rates. However, the CME Fed Watch Tool shows that rate cut expectations in September remain at 90.5%.

Bitcoin's dominance in the crypto market has dropped to a six-month low, reflecting a significant shift in investor interest towards altcoins. Bitcoin's market share now stands at 59.65%, the lowest it has been since January 2025. This decline is largely attributed to the increasing popularity of altcoins like Ethereum, which has seen its market share rise to 13.9%.

The surge in altcoin activity comes as decentralized finance (DeFi) projects gain momentum, and exchange-traded funds (ETFs) linked to Ethereum provide a boost. Increased interest in these altcoins, particularly among institutional investors, has led to the diversification of portfolios and a shift away from Bitcoin’s dominance.

This trend also signals a growing shift in market sentiment, with more traders exploring alternative cryptocurrencies as potential high-return investments. Bitcoin’s loss of dominance suggests a broader maturation of the cryptocurrency market, where investors are no longer solely focused on Bitcoin, but are diversifying into a broader range of tokens and projects.